Quite suddenly, the effects of restrictive Fed policy have shown up en masse. Just +114k jobs were added to company payrolls in July, less than +175k median forecast and below the lowest estimate among 74 economists surveyed by Bloomberg. Downward revisions to May and June subtracted another -29k.

Fed Chairman Powell stressed earlier this week that the downside risk to employment was real, and that the policymaking committee was attentive to both sides of the dual mandate. In doing so, he amplified the importance of this morning’s labor report.

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