The Odds of a September Rate Hike Have Plunged, but the Federal Reserve's Job Just Became Infinitely More Challenging

The probability of a Federal Reserve rate hike in September has dropped from 67% to 44% following a disappointing July jobs report that showed 23,000 job losses instead of expected gains. Fed Chair Kevin Warsh faces a difficult decision: raising rates could worsen the fragile job market, while holding steady risks allowing Trumpflation to become more entrenched in the economy. The Fed is caught between supporting employment and maintaining price stability.