This week’s economic data is messy in exactly the way investors hate: the headline says slowdown, the details say private demand is still hot, and the Fed is clearly not united on what happens next.

Q2 GDP came in weaker than expected at 1.5%, down from Q1 and below consensus. But under the surface, the private domestic economy looked much stronger, with households and businesses still spending aggressively.

That creates the problem: consumers are still resilient, but part of that resilience is being funded by shrinking savings. Spending rose faster than disposable income, the personal savings rate fell again, and inflation is still too high for the Fed to comfortably pivot.

Meanwhile, the Fed held rates steady, but three hawkish members pushed for an immediate rate hike. That split matters because markets keep  ...