Brainard and Tarullo counter Yellen’s outlook for 2015 rate hike

Divisions among US Federal Reserve has come into spot light as two key policy makers chose to speak against the merit of a rate hike this year, which is in clear contrast to what US Federal Reserve chair Janet Yellen has communicated. According to Ms. Yellen's view, a rate hike later this year is reasonable and likely.

In past two days, Daniel Tarullo and fellow Governor Lael Brainard spoke against near term increase in interest rates. This is clearly making December rate hike in doubt. Analysts point out that public disagreement highly unusual in FED and both policymakers seem to be raising doubts over Chair Janet Yellen's approach - as US reaches maximum employment, inflation will follow.

• According to Mr. Tarullo, FED should wait for further tangible evidence or pick up inflation before moving to hike rates. Mr. tarullo suggested Philip curve approach to inflation might not be suitable as variety of econometric estimates suggest that the classic Phillips curve influence of resource utilization on inflation is very weak now. Mr. Brainard gave out similar views. Mr. Brainard believes wait and watch to be the right approach as of now.

On the other hand, over the week end, FED's vice president Stanley Fischer reiterated similar view of Chair Yellen, that a rate hike by end 2015 to be likely.

Focus will be on this month's meeting for further clarity over if thinking has changed broadly. In the meantime, confusion likely to reign in the market.

Dollar index is currently trading at 94.48, down -0.3% so far today.