September, the Federal Reserve's no-motion or probabilities

SINCE TAKING OVER THE FED IN MAY THIS YEAR, WALSH IS FACING EXTREMELY COMPLEX MONETARY POLICY CHOICES. HOWEVER, THE NEWLY RELEASED SERIES OF WEAK MACRO-DATA MAY ALLOW THE FED TO MAINTAIN A WAIT-AND-SEE POSTURE FOR LONGER PERIODS. THE FALL IN RECENT INFLATION INDICATORS HAS DIRECTLY WEAKENED THE INTERNAL HAWKS' RHETORIC THAT “INFLATION WITHOUT INTEREST CANNOT COOL”. ON THURSDAY, THE UNITED STATES DEPARTMENT OF LABOR REPORTED THAT THE JULY PRODUCER PRICE INDEX (PPI) RING WAS SURPRISINGLY FLAT. THE DATA PUBLISHED JUST THE PREVIOUS DAY ALSO SHOWED THAT THE CONSUMER PRICE INDEX (CPI) RECORDED ONLY A SLIGHT INCREASE IN JULY AFTER IT FELL IN JUNE. WHEN THE FEDERAL RESERVE DECIDED LAST MONTH TO MAINTAIN INTEREST RATES AT THE SAME LEVEL, THE CHAIRMAN OF THE CLEVELAND FEDERAL RESERVE, HAMMARK, WAS ONE OF THE THREE DECISION MAKERS WHO VOTED AGAINST IT. SHE PUBLICLY REITERATED ON THURSDAY: "I THINK WE NEED TO TAKE ACTION NOW, BECAUSE I THINK WE NEED TO REDUCE INFLATION BACK TO THE TARGET OF 2 PER CENT AT A FASTER RATE THAN THE LONG-TERM DOWNWARD PATH AT CURRENT INTEREST RATE LEVELS." POLITICAL INTERVENTION BY THE WHITE HOUSE HAS NEVER CEASED, WHILE INTERNAL HAWKS EXERT PRESSURE. TRUMP CONTINUES TO CALL FOR A SUBSTANTIAL REDUCTION IN INTEREST RATES AND PUBLICLY ACCUSES WALSH'S “ENEMY” COLLEAGUES OF OBSTRUCTING THE PROCESS. IN THE FACE OF THE MANY GAMES, WALSH REMAINED SILENT ABOUT HIS PLANS AND AVOIDED PROVIDING ANY FORM OF FORWARD-LOOKING GUIDANCE. IN ANY CASE, MARKETS CONTINUE TO PRICE POTENTIAL AUSTERITY. ACCORDING TO THE FEDERAL RESERVE OBSERVATION TOOL OF THE CHICAGO COMMODITY EXCHANGE, INVESTORS ARE CURRENTLY PREDICTING THAT BY THE END OF THE YEAR THE FED'S POLICY RATE IS STILL MORE THAN 90 PER CENT LIKELY TO RISE. THE FED IS STRUGGLING TO MOVE FORWARD BETWEEN THE TOLERANCE OF INFLATION FIXATION AND INCREASED UNEMPLOYMENT AS A RESULT OF HIGHER BORROWING COSTS. REUTERS