New York Fed chief: Rate hike likely this year but hinges on data

To ensure that the Fed maintains credibility about its inflation target and to accelerate the recovery, Evans said he would prefer monetary policy to be “somewhat more accommodative” than his colleagues indicated it would be at their September meeting. The reasons given by the MPC, who once again voted 8 to 1 to keep rates steady were roughly the same as they were the previous month.

No one is sure when the Fed will raise rates, but ABN Amro agrees with Commerzbank, taking a rate rise this year off the table.

He noted that the performance of consumer spending data will be of particular importance over coming months.

“In the third quarter, payroll job gains have averaged 167,000 per month”.

Many economists believe the weak jobs report has eliminated the possibility of a rate hike at the next meeting in October. That would imply a rate hike in December rather than October, and investment professionals need to understand that there is no FOMC meeting on the books for November. He pointed out while he’s watching the conversation about the possibility of using negative short-term rates to boost growth, “the notion we would have to use that tool in the near term is not very plausible”.

USA employers slammed the brakes on hiring in August and September, hardening views among investors that the first rate hike won’t come until March.

The minutes showed Fed officials were concerned that “a material slowdown in economic growth in China and potential adverse spillovers to other economies were likely to depress U.S.net exports to a few extent”.

The surge in value of the US dollar, which has been fueled by expectations a strengthening USA economy would lead to higher interest rates, has been a factor decreasing the price of non-oil import prices.

“When the dust settled the message for the market was that the FOMC was pretty confident on the robustness of the USA economy and saw room for 2015 lift-off, but no imperative to do so if fragility persisted”, Steven Englander, global head of currency strategy at Citi, said in a note.

Spot gold was up 1.2 percent at $1,152.06 an ounce by 0930 GMT, after touching a three-week peak of $1,154 earlier in the session.

Central Bank thoughts have the dollar under pressure: Yesterday’s Fed minutes have certainly lengthened the odds for a rate hike this year.

Had a rate rise occurred, people would have wanted the currency to deposit in banks to earn the higher interest rates. But with rates already near zero, its ability to deal with further declines in inflation would be more limited. But minutes of that meeting released Thursday revealed concern that a sharp slowdown in China, which roiled markets this summer, could weaken the USA economy, and that inflation could remain excessively low.