Fed’s Lockhart says ‘lot more’ economic data available in December

He added on Monday that while the USA economy was not directly impacted by China’s recent economic slowdown, the Fed was closely watching Europe which does have higher exposure and could have a knock on effect across the Atlantic. The USA dollar hit multi-week lows against the euro and Swiss franc while stocks on major world markets were on track for their biggest weekly gain since 2011.

“We can not be certain about the pace at which the headwinds still restraining the domestic economy will continue to fade”, he said.

The argument made there by Fischer, and echoed by many Fed watchers and folks on Wall Street, was that with the Fed more or less meeting its labor market goal of “full employment”, inflation need not be running at 2% for the Fed to raise rates.

Although several Fed officials have been vocal in their support for a rate hike before the year-end, traders and investors remain doubtful about the Fed’s actions.

The Fed could still raise rates this year, but that’s “an expectation, not a commitment”, Fed Vice Chairman Stanley Fischer said Sunday to the Group of 30, a private-sector organization.

The tool also shows an implied probability of a 37 percent rate hike for the meeting scheduled for December 16, while there is a much higher chance of a rate hike during the January 27, 2016 meeting, at 47 percent. The metal, as a non-interest-paying asset, benefitted from ultra-low interest rates following the financial crisis, but fell to 5-1/2 year lows this year on expectations that U.S. rates would rise for the first time in almost a decade.

Meanwhile, 14 percent of the panelists said they think the Federal Reserve will begin a cycle of short-term interest rate increases starting at its October policy meeting.

Mr Tarullo said the goal of the new rules isn’t to force banks to become smaller, but to make sure large institutions take into account the risks that they pose to the broader economy. Palladium was down 0.1 per cent on Monday after climbing to a near-four-month high of $722 on Friday. The calculations are based on the assumption the effective fed funds rate will average 0.375 percent after the first increase, versus the current target range of zero to 0.25 percent.

Although she didn’t specifically say whether she expected a hike this year, Brainard said slowing growth in China and elsewhere posed potential risks to the USA economy.