USA economy seen expanding 2.3 percent in fourth-quarter: Atlanta Fed

Fischer said that while the stronger dollar and foreign weakness have been a “sizable shock”, he believes the US economy is holding up “reasonably well”, in part because the Fed has responded so far this year by deferring any moves to hike interest rates.

“It is critically important to me that when we first raise rates, the FOMC also strongly and effectively communicates its plan for a gradual path for future rate increases”, Evans said. But that shows a lack of understanding of how the Fed conducts monetary policy – indeed, the criticism makes no sense. The average rate on a prime mortgage loan reached 3.98 percent last week, according to Freddie Mac, the highest level since summer, when investors last expected the Fed to act. The Fed would not want to do that.

WASHINGTON, D.C.: The global Monetary Fund (IMF) said on Thursday (Friday in Manila) that the US Federal Reserve should delay raising interest rates until there are clear signs of a pickup in inflation.

So it has been disappointing to hear Republican presidential candidates bash the Fed in their debates and on the campaign trail.

Other policymakers had a different opinion arguing that the inflation should rebound, permitting the Federal Reserve to raise the interest rates soon from a close to zero and gradually proceed after that at appropriate times. Ted Cruz (R-TX) pandered to those voters in a recent Republican presidential debate, blaming the “loose money” policies of the Federal Reserve for raising the prices of various consumer products. Cleveland Fed President Loretta Mester (non-voter) is scheduled to speak today and she is likely to offer a cautious message about a December rate hike. Overall, however, the message is that a December rate hike looks more likely than the 66% probability assigned by financial markets. “Let’s be honest – the risk of delaying a rate hike is far smaller than that of moving too early”.

To be fair, this is mostly because energy prices have fallen dramatically over the past year. Brent crude oil is now trading at $44.6 per barrel.

On the Comex division of the NY Mercantile Exchange, gold for December delivery traded in a range between $1,079.00 and $1,088.00 an ounce before settling at $1,080.50, down 0.50 or 0.05% on the session.

“Even though we continue to expect personal spending to remain a key source of support for economic activity this quarter, this report does point to a very weak start to the quarter”, Millan Mulraine, deputy chief economist at TD Securities in NY, told Reuters.

Gold bullion priced in Euros also fell Thursday but less steeply, touching 5-week lows just above €1000 per ounce and still showing a 2.5% gain for 2015 to date.