Fed’s Lockhart Still Sees 2015 Rate Rise

Dudley said he wanted more information about the economy at the time of last month’s Fed meeting. Fed staff estimated inflation wouldn’t hit the 2% goal even by the end of 2018.

When the Fed does raise rates, he said, it is “critically important” that it tells markets clearly that rates hikes will be gradual.

Japan’s Aso: BOJ will continue QQE for as long as needed to achieve 2% inflation in stable manner.

“The ambiguity of the moment reinforces the need to closely watch the vital signs of the economy over the coming weeks to determine if the outlook has changed”, Lockhart said. “I perceive a touch more downside risk today than I saw a few weeks ago”.

Instead, with rates remaining low, the dollar is less in demand. The final meeting of the year is scheduled for mid-December.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.36, close to Thursday’s three-week lows of 95.17.

The European Central Bank’s meeting minutes struck a dovish tone, in line with a mood of general pessimism. The United Kingdom construction data, down 1.3 percent on the year, were the latest to cast doubts on the pace of an economic recovery that had provoked expectations, now cooled, of a rise in interest rates around the end of this year. To the upside, immediate resistance can be seen at 1.5382.

Evans is recognized as a dove, or one of a group of Fed members who believes the Fed should be extremely cautious about raising rates for the first time in near a decade.

“Over the intermeeting period, the concerns about global economic growth and turbulence in financial markets led to greater uncertainty among market participants about the likely timing of the start of the normalization of the stance of USA monetary policy”, it added.

The minutes also reveal concern about other risks, including the decline in the oil price, the appreciation of the USA dollar and the lower market-based inflation expectations. It has made session high at 1.2960 and lows at 1.2900 levels. Weaker inventories won’t last more than two quarters while the stronger dollar is likely to persist in keeping exports down through 2016. Job growth in September’s employment report was weaker than economists had expected.

The Fed didn’t raise its key interest rate in September because US inflation hadn’t picked up and the global economy had worsened. The dollar was last down 0.47 percent against the franc at 0.96150 franc.

BONDS, CURRENCIES: USA government bond prices rose slightly. Sydney was up 0.38 percent.

At the FOMC September meeting, officials chose to keep the federal funds target rate at zero to 1/4 percent, where it has been for nine years. Although Sterling dipped 0.4%, news out of London is that the FTSE 100 is on its way to its largest weekly rise in nearly four years – so there may yet be a chance for the pound to capture that Friday feeling!