Fed not yet decided whether to hike rates in Sept: Powell

The US Federal Reserve has not decided on whether it will raise interest rates next month, said Fed Governor Jerome Powell on Wednesday, Aug 5, 2015. PHOTO: BLOOMBERG

NEW YORK (REUTERS) - Federal Reserve policymakers have not yet decided whether to raise interest rates next month, an influential governor at the U.S. central bank said on Wednesday, appearing to push back on more hawkish comments the day before by a fellow U.S. official.

Fed Governor Jerome Powell said he and others on the policy-making Federal Open Market Committee will, between now and the closely watched Sept. 16-17 meeting, analyze data on the labor market in particular before making that decision.

"Nothing has been decided. I haven't made any decisions about what I would support, and certainly the committee hasn't," Mr Powell said on CNBC. "The economy is moving along about as expected ... the labor market continues to be strong," he said. But "more recent data has been mixed," including a weaker than expected reading of employment compensation in the second quarter.

The governor's unusual appearance on morning television came a day after a newspaper quoted Dennis Lockhart, president of the Atlanta Fed, saying it would take "significant deterioration" in the U.S. economy for him to not want to begin tightening monetary policy in September.

Mr Lockhart, a centrist and a voter on policy this year, said "there is a high bar right now to not acting" - comments that undercut Treasury bonds and lifted the dollar on Tuesday.

Mr Powell, however, said: "I just wouldn't want to speculate."

He noted two monthly jobs reports, including data on payrolls, earnings, and unemployment, will arrive before mid-September.

The "time is clearly coming" to hike rates, he said, but for now he said he sees "reasonable growth, better-than-reasonable job growth, and inflation which is still below our target."

Standard Chartered economist Thomas Costerg said the comments suggest some Fed centrists are still hesitating between hiking rates in September or at a meeting in December.

"It suggests that September is not yet a done deal as some Fed centrists are still unimpressed by the data," Mr Costerg said."It seems the Fed remains entrenched in its wait-and-see mode."

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