Fed’s vice chairman leaves door open to September rate hike

Federal Reserve Vice Chairman Stanley Fischer suggested Saturday that the Federal Reserve could potentially move to raise interest rates in September.

At an annual economic conference in Jackson Hole, Wyo., Fischer explained that the factors that have been keeping inflation below the Fed’s target have begun to dissipate.

There’s “good reason to believe that inflation will move higher as the forces holding down inflation dissipate further,” he said, according to the Associated Press.

{mosads}Fischer said the Fed is currently monitoring what’s happening in China following market volatility over the last week, as well as the U.S. economy.

“In making our monetary policy decisions, we are interested more in where the U.S. economy is heading than in knowing whence it came,” Fischer said. “We need to consider the overall state of the U.S. economy as well as the influence of foreign economies on the U.S. economy.

The Fed could raise rates after its upcoming Sept. 16-17 meeting, the AP noted, which Chairwoman Janet Yellen has previously hinted as a possible scenario.

Yellen skipped the conference Fischer attended, according to the report.

Fischer’s words come days after positive economic news: The government said this week that the U.S. economy expanded by 3.7 percent in the second quarter, much more than anticipated.

Wages and salaries and July also saw their biggest increase since last November, a government report released Friday said.