Recapping the day's news and newsmakers through the lens of CNBC.
The 10-year Treasury taper caper
The Fed will taper in September! Then again, maybe it won't. December's an option.
Since the Fed won't commit, the guessing game continues. The fixation of the moment is on the 10-year Treasury yield, which has climbed steeply to about 2.8 percent—up 120 basis points in three-and-a-half months.
The theory is that rising yields, which are caused by falling bond prices from heavy sales, could lead the Fed to postpone tapering. Because the 10-year Treasury is a benchmark, the Fed may feel that a spike in the 10-year yield will slow the economy.
And the uncertainty is making it hard for traders and investors to place their bets, making the markets more volatile and contributing to the recent dip in stock prices.
"The rapid rise in yields could make the Federal Reserve nervous especially if it nears the 2.9 percent mark."
—Kathy Lien, managing director of FX Strategy at BK Asset Management
"We think investors may have run ahead of themselves. After all, even if the Fed does start to scale back its bond purchases in September as we expect, interest rates will remain very low for an extended period of time."
—Jessica Hind of Capital Economics
Consumers aren't as happy as they could be
Consumer spending accounts for about 70 percent of economic activity. When they clutch their wallets tighter, the economy suffers.
That made today's consumer-sentiment report rather disappointing. Recent good news on jobs, the housing market and inflation haven't been enough to assuage consumer anxiety. Consumer sentiment has dipped to a reading of 80, down from 85.1 in July, which was the highest since July 2007.
The drop startled analysts, who had expected sentiment to continue strengthening, forecasting 85.5. Consumers, like investors, are jittery—and especially nervous about current economic conditions, though they expect the economy to keep growing. Consumers aren't really depressed—call them unimpressed.
"Perhaps the most important recent changes have been the increase in home values as well as the jump in the numbers that expect interest rate increases during the year ahead."
—Richard Curtin, director of the Thomson Reuters/University of Michigan's consumer survey
A nebulous housing market
Though news on the housing market has been good for months, today's housing starts report was a bit of a disappointment.
The Commerce Department said housing starts moved up by 5.9 percent in July, to a seasonally adjusted rate of 896,000 units a year. Sounds good, but economists had forecast 900,000. Much of the gain was in construction of multifamily units.
"We had a number of over a million in March this year. We can all debate about how great housing stocks have been doing. ... But in the end, rising interest rates—you can't sweep that under the rug. It's going to have an effect on housing."
—CNBC's Rick Santelli
"The 896,000 number suggested maybe so far a muted effect from those rising interest rates. ... I think we're really in this nebulous world right now where there's an expectation in the market that the economy will improve, but it's not in the data just yet."
—CNBC's Steve Liesman
Another small step toward cutting the cable cord
Let's call cable TV a frenemy. You can love it for the vast array of programs it offers, and hate it for forcing you to buy channels you don't want so you can get the ones you do.
The problem is that you're pretty much stuck with the cable company that won the franchise where you live, unless you want to turn to one of the satellite companies, or are "lucky" enough to live in the few places where phone companies compete for cable customers.
Things are changing. In what is believed to be the first deal of its kind, Viacom has tentatively agreed to let its popular cable channels Nickelodeon and MTV be carried on an Internet service being created by Sony, moving the pay-TV wall closer to the models of Netflix and Hulu. Intel and Google are working on similar services.
"I don't think the classic pay-TV subscription bundle model of television is going away anytime soon—it's a pretty compelling and cost-efficient smorgasbord. But all bets are off with the under-40 set—the growing group of folks who just want their video content when and where they want it, preferably without the messy commitment part."
—Tim Hanlon, head of Vertere Group
—By Jeff Brown, Special to CNBC.com