Fold, Call or Raise?

From the Reuters:

What the Fed is considering at its Sept meeting

U.S. inflation appears to have decelerated since the last Federal Reserve meeting, convincing investors the central bank will opt to keep rates steady again on Wednesday.

While prices outside food and energy are still rising more quickly than the Fed would like, some positive surprises from key inflation reports have corroborated policy-makers’ view that price increases will ebb as the economy slows.
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But barring scattered signals that wages could be picking up, price growth has remained relatively contained and the trend looks to be favorable for a steady monetary policy.
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After four consecutive monthly 0.3 percent spikes that scared the bejesus out of investors, core consumer prices grew a more modest 0.2 percent in July and August, alleviating concerns the Fed had lost its grip over price movements.

Of course, this still left core CPI at 2.8 percent year on year, well above the Fed’s presumed comfort range between 1 percent and 2 percent. But the waning inflation trend was enough to comfort investors in believing the Fed will not tinker with rates in the very near-term.

The central bank’s preferred measure of inflation, the core PCE, has leveled out at 2.4 percent, again above where the Fed would like it to be, but subdued enough to give them some breathing room.

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