The report is probably a shade on the weak side and it increases the chance that the Fed is more likely to stop raising rates at 4.75 percent at the middle of the year, rather than going higher.

The bond market took this report as a sign that core inflation may be bottoming and the Fed may still be in the tightening business later this year.

The bond market took this report as a sign that core inflation may be bottoming and the Fed may still be in the tightening business later this year,

The important thing is not whether the Fed can ease but the fact that people can even ask that question and some intelligent people say if the Fed raises rates in September, it would be a public relations disaster.

It's a dismal report. Unnerving. Is this the beginning of a one-two-three punch?

I lean toward a half point instead of a quarter. The Fed wants to shore up confidence, to show that, unlike the European Central Bank, it feels your pain.