Recent weakness in economic data along with financial market turmoil has severely dented rate hike hope this year from FED. This week two key policymakers at FED, Brainard and Tarullo publicly raised the possibility of a first rate hike next year and openly criticized Philip curve of classical economics, which is favored by some FED policymakers including Janet Yellen.
However, Loretta Mester, president of Federal Reserve Bank of Cleveland is clearly not in the camp. According to Mester, a monthly job gains in tune of 70,000-120,000 should keep unemployment rate stable. Compared to that number, job gains averaged well above that and close to 190,000.
She believes US economy is strong enough to handle a rate hike this year and FED should move away from emergency measure of zero interest rates since a small increase from zero is not tightening.
Latest data last night showed that inflation in US hasn't deteriorated as much as expected in September, in spite of lower oil price. In fact core inflation rose to 1.9% in September from a year ago.
Focus is totally on FED's December meeting as no hike is expected in October, however statement would be well scrutinized for further clues.
Ms. Mester, however is not a voting member this year but will be in 2016.
FXCM US Dollar index is currently trading at 11895.


China Sets 1.25% Overnight Reverse Repo Rate Below Market Expectations
State of emergency in Crimea as Ukraine focuses pressure on ‘jewel in Putin’s crown’
Supreme Court Backs Lisa Cook, Defends Federal Reserve Independence Against Trump Firing Attempt
South Korea Signals Possible Interest Rate Hike as Inflation Remains Elevated
Goldman Sachs Flags 3 Key Risks Ahead of Europe’s Earnings Season
Taiwan Central Bank Likely to Keep Interest Rates Unchanged Through 2027
Trump has made more than $1 billion from crypto in a year. How?
Goldman Sachs Raises USD/JPY Forecast, Sees Yen Weakness Persist Through 2027
ECB Keeps July Rate Options Open Amid Iran War Energy Price Risks
Japan Signals Surprise Yen Intervention Strategy as BOJ Hawkish Stance Puts FX Traders on Alert
Japan Signals Preference for Low Interest Rates as BOJ Policy Debate Intensifies 



