Federal Reserve Chair Janet Yellen painted a rosy picture of the USA economy at an economic symposium on Friday and said the case for a rate hike was strengthening, but gave little indication on when the central bank could next move.
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Asked about the dollar on Tuesday, Fischer said the currency’s strength affected US inflation and company profits but improvements in the labor market showed the economy had withstood this headwind.
Last Friday, Stanley Fischer, vice-chairman of the Federal Reserve, surprised markets with comments that were more hawkish than his boss, Janet Yellen, had given just hours before at the Fed’s Jackson Hole Symposium.
Federal Reserve Vice Chairman Stanley Fischer said Tuesday the USA job market is “very close to full employment” and that an interest rate hike – or a series of them – would be made based on economic signs.
Fed Chair Janet Yellen cited the odds for United States interest rate hikes have “strengthened” in recent months due to progresses in the jobs market and to expectations for firm economic growth. Currently, the Fed Funds indicator is predicting a 30 percent chance of a rate hike in September, up from 18 percent before Yellen’s speech on Friday.
However, Fischer used an interview on Bloomberg Television to insist that negative rates will not take root in USA, insisting that the Fed was not “planning to do anything in that direction”.
Japan’s benchmark Nikkei 225 added 2.3 percent to close at 16,737.49.
The dollar rose 0.5 per cent to a three-week high of 102.39 yen.
The index inched down mildly on Monday and registered at 95.538 in late trading.
Movers: Shares of Alstom SA (ALO.FR) gained 2.3% after the French infrastructure company late Friday said it signed a EUR1.8 billion deal to design and build 28 new high-speed trains for US rail operator Amtrak.
Gapen further suggested that September is the “most likely time” for a rate hike so long as August’s employment data is “solid” and committee members “maintain their faith in the strength of the economy”.
Among top losers, Air Liquide, Carrefour, LafargeHolcim and Peugeot dropped over 1 percent each.
Global factory activity surveys will also be released on Thursday.
Oil prices settled down more than 1 percent, ending two consecutive days of gains, pressured by high output from Middle East OPEC members and as a firmer USA dollar weighed on commodities.
Gold for December delivery on the Comex division of the New York Mercantile Exchange dipped $4.55, or 0.34%, to trade at $1,322.55 by 8:40AM ET (12:40GMT). The dollar’s bull market, which began in mid-2014, has been driven nearly entirely by expectations the Fed will begin to rein in stimulus.
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Fischer, who said that the data could weigh on any rates decision, gave no fresh clues on timing in a television interview on Tuesday.
