U.S. employers are hiring workers, but that is only making the Federal Reserve’s job harder.

Reuters reported that continuing jobs gains make Fed policymakers’ debate over whether the economy needs stimulus even more difficult, setting up a possible standoff with markets at their July 30-31 meeting.

“They are in a bit of a bind,” said Karim Basta, chief economist at III Capital Management. “On the surface, the data, in my opinion, doesn’t really support an imminent cut, but markets are expecting it, and I do think there’s a risk at this stage that they disappoint.”

Meanwhile, the Fed is sending fairly optimistic economic signals after opening up the possibility of cuts last month, when they cited muted inflation pressures and an economic outlook clouded by a U.S. trade war and slower global growth.

Meanwhile, the Fed is sending fairly optimistic economic signals after opening up the possibility of cuts last month, when they cited muted inflation pressures and an economic outlook clouded by a U.S. trade war and slower global growth.

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