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Fischer Signals 2016 Rate Hike With Economy Nearing Fed Goals

  • Fed vice chair talks days before Yellen’s Jackson Hole address
  • Fischer sees economic growth picking up in coming quarters

Federal Reserve Vice Chairman Stanley Fischer signaled that a 2016 rate hike is still under consideration, saying the U.S. economy is already close to meeting the central bank’s goals and that growth will gain steam.

“We are close to our targets,” Fischer said in a speech at the Aspen Institute in Aspen, Colorado on Sunday. “Looking ahead, I expect GDP growth to pick up in coming quarters, as investment recovers from a surprisingly weak patch and the drag from past dollar appreciation diminishes,” he added, without giving explicit views on his rate outlook.

Fischer’s remarks come less than a week before Fed Chair Janet Yellen speaks Aug. 26 at an annual symposium hosted by the Kansas City Fed in Jackson Hole, Wyoming. Investors are looking for clues from central bankers on the timing of potential interest-rate increases amid modest economic growth, strong job gains, and only moderate increases in inflation.

“It would be quite an event if Fischer went out so close to Yellen’s speech this week and said something” the Fed Chair disagrees with, said Roberto Perli, a partner at Cornerstone Macro LLC and former Fed board economist. “While I don’t...