The Federal Reserve’s No. 2 official said Friday the central bank hasn’t settled on whether to raise interest rates next month, and the option remains on the table.
“I think it’s early to tell” what will happen at the Fed meeting, Federal Reserve Vice Chairman Stanley Fischer told CNBC, citing the market turbulence of the past weeks.
Until recently, “there was a pretty strong case” to raise the Fed’s benchmark short-term interest rate from near zero at the central bank’s policy meeting Sept. 16-17, Mr. Fischer said. “It was not a conclusion yet; it was a case.”
But recent events—worries over China’s growth outlook, its currency devaluation and volatile global markets—suggest Fed officials need to step back and mull incoming data before deciding what action to take, he said.
“The change in circumstances which began with the Chinese devaluation are still relatively new, and we are still watching how it unfolds. So I wouldn’t want to go ahead and decide right now what the case is, compelling or less compelling” for rate rises.
It seems markets have concluded that the “case is less compelling”!