by Calculated Risk on 8/31/2015 07:59:00 PM

From Tim Duy: Does 25bp Make A Difference?

Bottom Line: I am coming around to the belief that the timing of the first rate hike is more important than Fed officials would like us to believe. The lack of consensus regarding the timing of the first hike tells me that we don't fully understand the Fed's reaction function and, importantly, their confidence in their estimates of the natural rate of unemployment. The timing of the first hike will thus define that reaction function and thus send an important signal about the Fed's overall policy intentions.

Tuesday:
• At 10:00 AM ET, the ISM Manufacturing Index for August. The consensus is for the ISM to be at 52.8. The ISM manufacturing index indicated expansion at 52.7% in July. The employment index was at 52.7%, and the new orders index was at 56.5%.

• Also t 10:00 AM, Construction Spending for July. The consensus is for a 0.8% increase in construction spending.

• All day, Light vehicle sales for August. The consensus is for light vehicle sales to decrease to 17.3 million SAAR in August from 17.5 million in July (Seasonally Adjusted Annual Rate).