Vice-chair of the Federal Reserve, Stanley Fischer, speaking on incorporating financial stability into monetary policy

  • Downward pressures on inflation related to dollar, energy will fade next year
  • US economy weathering 'reasonably well' the strong dollar and foreign weakness
  • Expects PCE inflation to rebound to about 1.5% in 2016
  • Expects 2 pct core and overall inflation over medium term
  • Says was appropriate to delay rates liftoff to offset dollar rise
  • Notes that October FOMC said it may be appropriate to raise rates in December
  • Good reason to expect dollar drag on GDP well into 2016
  • Fed models show dollar will likely decrease core inflation by 0.25-0.5 percent in 2015
  • Strong dollar played appreciable role in keeping inflation well below target

Headlines via Reuters

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Don't know about everyone else ... but to me that all sounds very non-definitive on a December rate hike

And, of course, a few traders crossed the spread in stocks in the US Thursday, hit a few bids ... so that'll put the wind up the FOMC & could well spook them. Again. Bunch of wusses.

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ps. here is the full text of Fischer's speech:

Vice Chairman Stanley Fischer

At the "Monetary Policy Implementation and Transmission in the Post-Crisis Period," a research conference sponsored by the Board of Governors of the Federal Reserve System, Washington, D.C.

November 12, 2015

The Transmission of Exchange Rate Changes to Output and Inflation