This is the Fed’s market. The carnage in the foreign exchange market is proof positive that Bernanke and Co. is in way over its head. Meanwhile the Dow is down 4.3% in August and on its way to its worst month since May 2012. Steve Russolillo explains in the Wall Street Journal:
The uncertainty explains Wall Street’s negativity this month. The Dow has edged up in each of the past two days, but it fell in 13 of the past 17 trading days. The blue-chip average is down 4.3% in August, on track for its worst monthly performance since May 2012. The declines have been even more stark in emerging-market currencies, which appear to be more susceptible to the Fed slowing its asset-purchase programs.
The mixed batch of economic data only put more emphasis on the government’s monthly jobs report, due one week from today. That will be the last of the major economic indicators before next month’s policy meeting.
The Fed only has a few weeks left before it elects whether to slow its stimulus. The decision won’t be an easy one.