Bloomberg Surveillance · Friday, September 4, 2026
Despite the strong August jobs report, the Federal Reserve is likely to maintain its focus on inflation data, particularly the CPI print, when making interest rate decisions. The unemployment rate's stability at a low level is a key signal for the Fed, while payrolls are being scrutinized for trends rather than immediate cyclical signals.
“I think what I think the Fed will, it's kind of a headline pullout of this. I mean, payrolls have been difficult to read for some time because we've got so many shifts in the labor supply that they've really kind of downweighted that in terms of a strong cyclical signal. The one that they still look a lot to, the unemployment rate, and wow, I mean, that thing is really stable, has been low and stable.”
“In the messaging from Fed officials, I really haven't heard anybody pointing to the labor market as something that is decisive in what do they do next. It's really trying to interpret where inflation is and where it's headed.”
“Waller yesterday was not. You know, paying much attention to the labor market. I mean, again, it's consistent with Waller. It's consistent with what Warr said about the labor market.”