How Curved is the Curve

The payroll data came out exactly like Jay Powell would probably have wanted them: the downward revision to the previous months in job creation solidifies a move into below-trend territory, while a lower-than-expected wage print came as an additional boon. It would now take a very bad surprise in the inflation print for August to convince the FOMC to hike again on 20 September, and this adds to our belief that “peak Fed Funds” was hit in July.