Plenty could happen between now and 16 December when the Federal Reserve has to decide whether to raise interest rates for the first time since 2006. Stuff happens. As Harold Wilson once famously said, a week is a long time in politics.
But barring something completely unexpected, it now looks increasingly likely that the US central bank will end its dithering and raise the cost of borrowing just before Christmas.
The latest non-farm payroll data on Friday removed the last big obstacle that might have given the Fed pause for thought. Make no mistake, the US jobs market is not exactly going all guns blazing. In previous recoveries, the 211,000 jobs created last month would have been considered modest. Annual wage growth actually declined a bit, from 2.5% to 2.3%, and underemployment rose slightly.
But the headline payrolls number was what interested Wall Street. It beat expectations, although not by much, and was accompanied by upward revisions to employment growth in previous months. The Fed might have been swayed by a really weak payrolls number, but this was not it.
It would, therefore, now be a major surprise were the Fed to sit on its hands on 16 December. Indeed, attention has already started to focus on what happens next. With inflation weak and the labour market improving but far from booming, Janet Yellen, the Fed chair, would like to take things slowly and steadily.
The problem is that once the Fed has raised rates once, the markets will start to speculate on when it will move again. It is entirely possible that the economic data for the last couple of months of 2015 will suggest that the US economy is stronger than it is. That would put pressure on the Fed for further interest rate increases that it might live to regret.
