Goodbye September rate hike. From the much anticipated Dudley Q&A: DUDLEY: CASE FOR SEPT RATE HIKE LESS COMPELLING DUDLEY:INTNL DEVELOPMENTS TIGTHEN FINL CONDNS, MAY HURT ECON DUDLEY: RATE HIKE CASE COULD BE MORE PANICKY BY SEPT FOMC DUDLEY SAYS INTL DEVELOPMENTS HAVE RAISED DOWNSIDE RISKS 10:36 08/26 DUDLEY: HAVE TO CONSIDER INTNL DEVELOPMENTS; CAN AFFECT ECON Transitory: DUDLEY: EXPECTS DOLLAR, OIL EFFECTS TO BE TRANSITORY ON U.S. INFLATION On inflation: DUDLEY: LOW INFL APT TO BE TRANSITORY Because it is only a matter of time before the money paradrops begin? DUDLEY: US DATA GOOD, BUT CAN'T JUST LOOK AT DOMESTIC DATA Yes, have to also look at domestic stocks. Oh but wait: DUDLEY: I DON'T HAVE A VIEW ON WHY THE STOCK MARKET IS DOING WHAT IT IS DOING DUDLEY: STOCK DROP HAS LITTLE S-TERM EFFECT ON U.S. ECON And the punchline: DUDLEY: I REALLY HOPE WE CAN RAISE RATES THIS YEAR But the markets won't allow us. TSYs jumping on the news, USDJPY dumping on USD weakness with stocks shocked, and waiting until the algos reverse the correlation trackers so tthey can push stocks higher on a weaker dollar, resulting from this latest admission of Fed policy failure.