Surprise! The Federal Reserve almost certainly won't hike rates in September.
The latest excuse? The so-so August jobs report. The economy added 151,000 jobs. That's below the healthy 200,000+ new jobs we've come to expect, as hiring has surged in recent years.
But step back and look at the bigger picture: The U.S. economy has recovered. No, it's not perfect, but nationally, unemployment has been at 5% or below for nearly a year. Consumers are happy and spending at a healthy clip, and the economy is expected to grow at 2% this year. Not spectacular, but steady.
Yet America's central bank is keeping interest rates at levels that are so low, they scream: "Crisis!"
"It is no longer credible to assert that this economy is underperforming," says Chris Rupkey, chief financial economist at MUFG Union Bank.
Janet Yellen looks afraid
Yet Fed officials just doesn't seem to have it in them to act. The Fed slashed rates to nearly 0% during the crisis. It's why you get practically no interest on your savings at the bank. Since then, the Fed has raised rates only once -- last December -- to a range of 0.25% and 0.5%.
Yellen calls this a "gradual" pace of increases. But one hike a year gives the impression that the Fed is timid. Or worse, that it's worried about upsetting the stock market. Now Wall Street is pricing in just one increase in December, if that.
"She cannot raise rates just 25 basis points per year without looking completely ridiculous," says Rupkey. He notes that former Fed chair Alan Greenspan had no problem raising rates 200 basis points a year, when the economy warranted.
The excuses are getting thin
The excuses for holding off rates are getting very thin. A year ago, it was China. Then in early 2016, all ducks seemed to be in order, but the stock market wobbled. Then, it was Brexit.
But guess what? The U.S. economy continues to hum along through all of these hiccups. None of those events derailed it.
There will never be a perfect time to raise rates. There will always be some data point that doesn't line up, but the question isn't is everything ideal, it's whether the economy is solid enough for another modest hike.
Notice that almost all of the problems the Fed has flagged in the past have subsided. Brexit isn't sinking the global economy. China has stabilized (at least for now). Oil prices are holding steady. The U.S. stock market is back at record highs, and hiring remains pretty good.
"The good times have been rolling for quite a while now," says economist Ed Yardeni of Yardeni Research.
Is the Fed creating even more problems?
America's central bank has two goals: getting the economy to full employment and keeping prices (aka: inflation) stable.
Pretty much everyone admits the economy is "close" to full employment. There are pockets of problems in the job market (CNNMoney has chronicled many of them, including the plight of the long-term unemployment and the struggles of the over-45 crowd). But the labor market is nowhere near the "red flag" level that such low interest rates imply.
The only real holdout for the Fed is inflation. The goal is 2% annual inflation, but it's still under that level. Similarly, wages are only growing about 2.4% a year, well below the level the Fed would like to see -- of 3.5% or higher.
It's disappointing, but there are reasons to believe inflation won't be as high as it used to be as trade and technology keep the costs of goods -- and labor -- down. Morgan Stanley also notes that this low inflation trend is similar to what happened after the Great Depression.
The larger concern for the Fed should be whether such low rates are actually hurting the economy.
"Apparently, it hasn't dawned on Fed officials that their ultra-easy monetary policies might have contributed greatly to the forces of global economic stagnation and deflation," says Yardeni.
If the Fed doesn't start tapping the brakes soon, it runs the risk of losing credibility and creating even more problems down the road.