The Fed's Beige Book report was filled with commentary mostly positive on the U.S. economy, and collectively implies that a rate hike in September is definitely not off the table.
Some excerpts hint at this:
1) "economic activity continued expanding across most regions"
2) "Retail contacts in a majority of Districts reported that their sales and revenues continued to expand."
3) "Most Districts reported increased auto sales."
4) "Districts reporting on the banking sector mostly tallied increases in both business and consumer loan volumes."
5) "Reports on residential and commercial real estate markets across the Districts were mostly positive."
6) "Most Districts reported modest to moderate growth in labor demand."
7) "This tightening of labor markets was said to be pushing wages up slightly in selected industries or occupations"
Given the global uncertainty, most in the trading community have turned decidedly against raising rates in September. The issue is not a 25 basis point hike; it's a small number. The issues is the Fed's credibility. Many traders say the market volatility is signalling the market is having a confidence issue with the Fed's analysis and intentions.
Judging by the Beige Book, it seems the odds of a rate hike are a bit higher Wednesday than it was Tuesday. I'm not so sure there will be a huge response in the stock market if they do raise; I'm more concerned about the bond market, where a sudden spike in rates is a real possibility.
This makes Friday's jobs report even more important. Consensus is for a gain of 220,000 jobs. A very low number--say, below 170,000---will likely be greeted as an indication the Fed is unlikely to raise rates.
Similarly, a very high number—say, north of 280,000—would likely confirm that a rate hike is a very real possibility.