The Fed vice-chair Stanley Fischer at an IMF event in Washington

  • Notes that markets put probability of Dec hike above 70%
  • Sees moderate growth supported by spending and investment
  • PCE inflation rising towards 2% as headwinds fade
  • Mentions possibility of exceeding 2% inflation goal
  • Labor market 'had a pretty good year'
  • Need fewer monthly jobs if participation fades
  • Full text

There are more hawkish hints here but that's normal from Fischer. I don't think markets are going to shift on these comments and Fed probabilities won't change. It's all about the election at this point.

Here is an interesting line on demographics and jobs growth:

"If labor force participation was to remain flat, job gains in the range of 125,000 to 175,000 would likely be needed to prevent unemployment from creeping up. However, if labor force participation was to decline, as might be expected given demographic trends, the neutral rate of payroll gains would be lower. If we assumed a downward trend in participation of about 0.3 percentage point per year, in line with estimates of the likely drag from demographics, job gains in the range of 65,000 to 115,000 would likely be sufficient to maintain full employment."


Fischer continued to speak later on a panel:

  • Oct avg hourly earnings saw quite a sharp step up
  • Fed 'pretty close' on both parts of mandate