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Markets price a 90% probability of a Fed hike, but the data do not justify monetary panic. August CPI was lifted by energy. Rate hikes do not drill a single well, build a pipeline, or lower gasoline prices. What they do is raise mortgage, credit card, and business-financing costs, hurting families, investment, and small firms. The entire burden of higher rates falls on the shoulders of job creators and families, while government spending and energy prices will not be affected. Meanwhile, the labor market has improved, but not enough. 162,000 jobs were created in August, unemployment was steady at 4.1%, and participation was rising. Do not confuse an energy-price shock with demand overheating. Hiking into a recovering job market would be a massive policy mistake. The Fed has other tools to reduce monetary inflation, and balance sheet management is the way, not rate hikes. via Bloomberg