No one month of data is decisive. It tells us the hopes that the labor market was steadying were too much. We have to keep our eye on both the labor market and inflation, which is printing above target with oil prices rising.

Average the two and keep watching. The job market is in a low hiring, low firing state, making it vulnerable to changes. Sentiment surveys and firms don't indicate strong hiring.

It's a different universe than when inflation was below target. We have inflation above target. It's a balance of risks calculation. The 75 bps of cuts last year should put a floor under the labor market, but this report has my attention.

The issue with oil is how long it will last. Consumers feel it immediately at the gas pump.

At this point we have two-sided risks. The oil price shock is a real thing that can cause consumers to pull back on spending. The labor market gives me concern, but the data is hard to interpret due to strikes, snow, and population rebenchmarking.

It depends on how long elevated oil prices continue. If the conflict settles quickly and the disruption doesn't last, prices come back. You don't want to act aggressively when you don't know. It's really hard to hike right now with a labor market that isn't clearly steady. We need more time.

I'm more optimistic that AI-driven productivity growth will go beyond cost-cutting. But we learned in the 90s you can't reflexively say it's coming; you have to dig for the information and then make policy. We're in a different world with an oil price shock and a vulnerable labor market.

Another alternative is to hold rates steady while we collect information. I'm certainly not thinking we should be hiking. There's a real issue about whether we should act immediately on the labor market or wait to think through the data.

Contacts say tariffs are just coming through and will end around the middle of next year, expecting a run-up in inflation for a couple months then a come-down. The pressure now is oil. Contacts say 'don't get over your skis, don't go too fast' as it may go away. We have to be 'studying the boat' while collecting information.

I have not seen an example that the economy is running hot right now. We have extremely solid growth and a labor market with low hiring, low firing. That doesn't feel hot to workers, and with inflation above target, it doesn't feel comforting to consumers.