Fed officials supported a possible December interest rate hike with one key policy maker saying the risk of waiting too long was now in balance with the risk of moving too soon to raise rates. With a rate hike this year now seen as very likely, the focus is shifting towards the pace of lifts. St. Louis Fed President James Bullard said that the pace would depend on the state of the world's number one economy and should not be seen as a steady path higher. Bullard believed growth would be strong, and the jobless rate should slip into the 4% range. At the same time, a key ally of Fed Chair Janet Yellen, New York President William Dudley, said that he saw the pace of tightening to be quite gradual. With regards to the US inflation, consumer price growth was predicted to accelerate to 1.5%, from 1.3%, as pressures related to the strong Greenback and low energy prices subside, Fed Vice Chair Stanley Fischer said.
New Zealand
Low milk prices and Auckland's soaring housing market remained the key risks to the New Zealand's financial system, while the lower New Zealand Dollar is helping to cushion the nation's economy, the Reserve Bank of New Zealand said. The central bank reported that risks to financial stability increased since May due to build up in Auckland house prices relative to incomes, ongoing weakness in global dairy prices, as well as China's slowdown and its impact on commodity prices. Global dairy prices plunged more than 50% from a peak in early 2014 to mid-2015. Even though prices rebounded around 30% between August and September, they remain well below profitable levels for many New Zealand farmers.
UK
Andy Haldane, the Bank of England's chief economist, argued against an interest rate hike in the near future as wage growth fizzled and the outlook for the global economy remained uncertain. Haldane reiterated his view that the central bank's next move might be even a rate cut rather than lift as the UK economy appeared to be losing steam. Haldane, considered to be the most cautious policy maker when it comes to the timing of an interest rate hike, had previously warned that the global economy might be heading into a new crisis triggered by slower growth in emerging markets. The economist also talked about the structural changes within the British labour market and its effect on productivity, wage growth and the overall economy. The MPC was surprised about weak wage growth relative to the overall strength of the nation's economy and tightening labour market.
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