Take a Three-Quarter Point Hike, Food Safety Changes, and Grab the Chips 8/10/26

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**Kelly Evans** (0:58)
You're listening to The Exchange. Here's today's show.
Thank you very much, Scott. Stocks are edging lower as we come off the best week since April for the major averages. I'm Kelly Evans, and welcome to The Exchange. S&P is down five points right now. The memory trade, by the way, is so last month now as security and networking names lead the markets today. Travis Prentice of the Informed Momentum Company told us to watch these names a week ago.
Sure enough, Palo Alto, CrowdStrike, and even Datadog, which sold off after earnings last week, they're back in the driver's seat. Elon Musk says AI agent traffic will vastly outnumber human usage of the Internet. The CEO of Checkpoint joins us exclusively to weigh in on that. Plus, the acting head of the FDA joins us on the heels of a new proposal that would tighten oversight of what goes into our food. As Taylor Farms recalls products from Walmart and Kroger as the Salmonella outbreak grows, we'll ask the commissioner about all of that coming up. But let's begin with the question hanging over these markets. Was the surprise drop in payrolls we got last Friday enough to take Fed rate hikes off the table this year? The market is still pricing in a hike in September. We're joined by senior economics reporter Steve Leesman.
I guess, Steve, they still feel like we need a little bit here, as long as it's not a lot more than that. But what is your take on having a weekend to digest now?

**Steve Leesman** (2:21)
I think it takes it off the table for the week. Because for a couple of days tomorrow, we get CPI. That's gonna be more important. I had a very different take on the job market and the data from Friday than most other people, from what I can read. A lot of these, the press talked about this idea of, oh my God, minus 23,000, we're losing jobs. That was not my concern at all. When I look at that number, I think of it well within the range of what may be normal. And that's the problem. The problem is that if normal now is somewhere between, could be minus 50 to plus 50, that we need to learn to live in a world and businesses dramatically have to adjust to a world where bottom line, the easy growth from just population growth, that may be gone.
And that's a new world, that's a different world. It's a different set of concerns in whether or not we have an immediate cyclical issue of, are we losing jobs, the economy is slowing down? The economy, given the potential growth rates, can actually be doing just fine at minus 23,000. Of course, you don't want to see negative, negative, negative. But I do not look necessarily at a minus 23,000, which Kelly's on the first print with a massive different error rate around it. Okay?
That doesn't seem to me to be necessarily an issue. What is an issue is how businesses, the economy and investors adjust to a world without population growth, without labor force growth and get used to where the normal is, or the new normal.

**Kelly Evans** (3:50)
We're showing yields on the screen there. 470 for the 10 years, so it is moving higher today. So again, if Friday's report was more of a classic sign of the business cycle, and we're losing momentum, you'd be going the other way. We'd probably be going there. And we did on Friday a little bit. You know, yields came in a little bit, but here we are, back up to 470, probably following oil necessarily.

**Steve Leesman** (4:10)
One of the interesting things is that we had our retail monitor out this morning. It was pretty good numbers. 0.3 down a tenth.
Consumption has remained relatively stable while oil prices have surged. That may tell the Fed that you've got good, strong, underlying demand there, and you're not having an offset to the supply shock in a demand reduction. So that's a little bit inflationary to get these kinds of strong numbers amid the oil price shock.