He went on to say the Fed won’t raise rates before returning to nominal levels and that drop of inflation is due to low crude oil (USO, quote) prices and other raw material. He believes this will be temporary and inflation will return to normal prices in the near future. Fischer added that a large part of the decline of inflation is temporary and has to do with the drop in the price of oil.
Just last week Federal Reserve Bank of Atlanta President Lockhart suggested a rate hike in September albeit he left the door open with comment barring no significant deterioration in the U.S. economy.
Add in comments from Fed Governor Powell on CNBC last week that “nothing has been decided”.
It seems the Fed Governors are trying not to forecast when the fist rate cut since 2008 will occur.
Bottom Line: With no real clear action yet on the beginning of a rate hike (I maintain the plan for future rate hikes once the Fed begins to hike is more important) there is however, a clear trend. The U.S. dollar (UUP, quote) remains strong and commodity prices remain under pressure despite the lack of transparently. I simply want to stay away from gold and other commodities and look at being long the U.S. dollar against commodity exporting currencies such as the Aussie or the Canadian dollar.