It's officially Fed day. We expect a "hawkish pause" today. The Fed will hold interest rates unchanged but lay the groundwork for a December rate hike, bringing total rate hikes in 2026 to +50 basis points. Why? Because the US economy is now facing both supply-side and rising demand-side inflationary pressures, while the labor market continues to weaken beneath the surface. This puts the Fed in an increasingly difficult position: Inflation is demanding tighter monetary policy, while underlying labor market weakness is calling for the opposite. We expect the Fed to prioritize inflation today, keeping the door open for further tightening in December.