If the Fed is looking to tick the inflation box then the 2.0% core number does it
On paper the inflation data is good enough. Strip out energy and 2% is the Fed's goal, even headline put on 3 pips from last month and that's a decent move in itself. Then let's look at the monthly measure Adam pointed out;
"The gauge I'll be watching most closely is CPI ex-food and energy m/m. It's risen by 0.2% for the past two months. A third month would put inflation at annualized rate above 2.5%, which is easily high enough for the Fed to hike."
That came in as expected at 0.2%
The fly in the ointment is the earnings number and it might be a fairly big fly. The one big worry the Fed will have over raising rates is what damage it does to the population. Businesses can probably weather a hike, banks definitely can, the follow through to the average worker and consumer is the bigger story and the numbers today were soft
It looks like the Fed are going to be stuck between that rock and a hard place all the way. If earnings had come in strongly that would have been the icing on the cake for this report
The move, (or lack of it) in the dollar shows how the market is taking the FOMC in its stride. No-one is rushing in to fill buckets with bucks on the report. That's an important clue in how the market is set up for tomorrow
