At 296,000, claims have slipped back to a five-week low, ... This is simply too low a level to be consistent with a major change in the labor market.

The Fed's minutes do not change the near-term outlook for policy despite the strong market reaction. Clearly there is some debate as to how much further tightening will be necessary, as the minutes say the number of hikes will likely 'not be large,' but 'large' is undefined. This does not read like a Fed where everyone is looking for a reason to stop.

Clearly, this report looks awful, but it does not presage any change in the underlying inflation environment, ... PPI is not driving Fed policy.

There is a clear change in the tone of the Beige Book, but not all the news is good.

This will doubtless shock the markets, and makes an October rate cut more likely, but it does not change the outlook for a near-term recovery, ... Falling employment, rising unemployment lag activity. These numbers reflect the second quarter economic stall.