Despite the number of downside risks New York Fed President Dudley mentioned during the Q&A session following his remarks, he remains hopeful that the Federal Reserve will raise interest rates in 2015, effectively diminishing the probability of a September hike. According to Dudley “the case for September rate hike [is] less compelling.” Citing international developments in particular, Dudley was concerned about the potential for these events to tighten liquidity conditions further, a problem that might be exacerbated by the FOMC choosing to hike rates. When it came to inflation, he was fairly upbeat and optimistic, expected the impact from lower oil prices and the higher US dollar to be temporary dislocations instead of long-term trends. The one surprising comment was the dismissal of increased asset purchases, stating “we are a long way from additional quantitative easing.” The dollar managed to book further gains on the comments, pushing gold prices back below the key $1132 level.
FOMC Member Dudley Hopeful
Analisi Giornaliera - 27/08/2015