Fischer Speaks At Jackson Hole: "Fed Should Not Wait Until 2% Inflation On Tightening"

Today’s most anticipated event at this year’s Jackson Hole event was the panel on “Global Inflation Dynamics”, not because there is any core inflation in the world (at least not in the way the CPI measures it), especially not now that China is finally in the deflation exporting business, but because the most important speaker at this year’s Jackson Hole, Fed vice chairman Stanley Fischer, alongside BOE’s Mark Carney, the ECB’s Constancio and the RBI’s Raguram Rajan, would comment.

Moments ago he just did, and courtesy of Market News, here are the highlights:

FISCHER: SHLD NOT WAIT TIL 2% INFL TO BEGIN TIGHTENING

FISCHER: NEED TO ‘PROCEED CAUTIOUSLY’ IN NORMALIZING POLICY

FISCHER: FED FOLLOWING DEVELOPMENTS IN CHINESE ECONOMY

FISCHER: RATE PATH MATTERS MORE THAN TIMING OF FIRST HIKE

FISCHER: RISE IN DOLLAR COULD RESTRAIN GDP GROWTH IN ’16, ’17

FISCHER: $ MAY HOLD DOWN CORE INFL ‘QUITE NOTICEABLY’ THIS YR

FISCHER: NEED CAUTION IN ASSESSING INFL EXPECTATIONS AS STABLE

FISCHER: ‘GOOD REASON’ FOR INFL TO MOVE UP AFTER OIL/$ PASSES

FISCHER: CORE INFL ‘TO SOME EXTENT’ IMPACTED BY OIL PRICES

FISCHER: ECON SLACK IS ONE REASON CORE INFL HAS BEEN LOW

FISCHER: OIL PRICE IMPACT ‘OUGHT’ TO BE LARGELY ONE-OFF EVENT

FISCHER: LABOR MARKET ‘APPROACHING’ MAX EMPLOYMENT OBJECTIVE

As AP notes, Fischer said there’s “good reason to believe that inflation will move higher as the forces holding down inflation dissipate further.” He says, for example, that some effects of a stronger dollar and a plunge in oil prices have already started to diminish.

Both in his speech Saturday and in an interview Friday with CNBC, Fischer made clear that the most recent economic data and the direction of financial markets over the next two weeks would help determine whether the Fed raises rates next month.

In the CNBC interview, Fischer acknowledged that before the recent market volatility, “there was a pretty strong case” for a rate hike at the Sept. 16-17 meeting, though it wasn’t conclusive. Now, the issue is hazier because the Fed needs to assess the economic impact of events in China and on Wall Street.