$5,000 Handouts Won't Stop Inflation, Trump's Economic Record Takes Center Stage

The US labor market data for September has cast a shadow over the Federal Reserve's upcoming decision on interest rates. The Bureau of Labor Statistics reported that hiring numbers fell short of expectations, with downward revisions and a cooling pace of wage growth. This has reduced the likelihood of a second consecutive rate hike from the Fed, which is now seen as a 1-in-4 chance.

BMO's Ian Lyngen and Vail Hartman expressed skepticism about this assessment, arguing that the jobs update raised the bar for September's CPI to be hot enough to justify an October rate hike. Meanwhile, Kevin Warsh, the Fed chair, has been criticized for his lack of independence and accused of being influenced by politics.

The FOMC minutes will be released on Wednesday, which will provide insight into last month's policy meeting. The ISM services index and the preliminary read on University of Michigan sentiment will also be released this week, with the latter expected to show a decline in consumer confidence.