Comments from Federal Reserve Vice-Chair Stanley Fischer August 28:
- Previous case for September liftoff was pretty strong
- Previous case for Sept liftoff wasn't conclusive
- Wouldn't want to decide now on liftoff
- Confidence 'pretty high' that inflation will get back to 2%
- Some factors affecting inflation are temporary
- Still need to watch the impact of yuan depreciation
- "We don't have a whole lot of inflation going on so we don't have to move immediately"
- US close to full employment
- US economy "working pretty well"
- "We're getting back to normal and at some point we'll want to show that"
- "I think [markets] could settle fairly quickly"
- Signals that China was the trigger for market volatility
- Direct affect of China on US is reasonably small
- "We're heading in that direct" (toward hikes), notes importance of next week's jobs data
- Fed has time to wait and see incoming data
- Would want to wait awhile after first hike before doing anything else
Hawkish comments from Fischer keep a rate hike on the table for September. The US dollar and stocks starting to feel some heat.
