The Federal Reserve under new chairman Kevin Warsh faces a gut check this week that will hit your wallet harder than Wall Street's portfolio: Friday's jobs report and Wednesday's Consumer Price Index could force interest rates up, meaning pricier mortgages, car loans, and credit cards for working Americans already absorbing inflation the central bank has failed to tame for over five years.
Here is why it matters. Inflation sits at 3.3 to 3.5 percent — well above the Fed's own 2 percent target — and it has missed that mark for more than half a decade. Three of 12 Fed policymakers already dissented at the last meeting in favor of a quarter-point hike. Markets are now pricing a nearly 60 percent chance of a rate increase in September, according to Reuters. That is not speculation. That is the betting line of people whose money is on the line.
The jobs picture is muddy at best. Economists polled by FactSet forecast 100,000 new jobs for July, up from a weak 57,000 in June. But the range is enormous: a Reuters poll puts it at 80,000, while Vanguard senior economist Adam Schickling forecasts just 18,000 new hires with
