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| US rate hike in September 'possible' | |
| (about 1 hour later) | |
| An influential member of the US central bank has said that an interest rate rise is "possible" in September. | An influential member of the US central bank has said that an interest rate rise is "possible" in September. |
| "We're edging closer towards the point in time where it will be appropriate I think to raise interest rates further," said William Dudley, president of the New York Federal Reserve. | "We're edging closer towards the point in time where it will be appropriate I think to raise interest rates further," said William Dudley, president of the New York Federal Reserve. |
| He told Fox Business Network that, depending on the data, a rate hike was possible at the next policy meeting. | He told Fox Business Network that, depending on the data, a rate hike was possible at the next policy meeting. |
| The Fed has three meetings left in 2016 and is expected to raise rates once. | The Fed has three meetings left in 2016 and is expected to raise rates once. |
| Data released Tuesday painted a mixed picture of the economy however. | Data released Tuesday painted a mixed picture of the economy however. |
| The US Labor Department reported inflation rose just 0.2% in July, the same rate as the previous two months. Excluding food and energy, prices rose just 0.1%, the slowest increase since March. | The US Labor Department reported inflation rose just 0.2% in July, the same rate as the previous two months. Excluding food and energy, prices rose just 0.1%, the slowest increase since March. |
| The Fed has said inflation is a key metric for deciding when it will raise interest rates. It has set a target of 2% inflation over the next few years, but according to its own measurement the annualised rate has been stuck at 1.6% since March. | The Fed has said inflation is a key metric for deciding when it will raise interest rates. It has set a target of 2% inflation over the next few years, but according to its own measurement the annualised rate has been stuck at 1.6% since March. |
| The stubbornly low inflation has been citied by the Fed as a reason for holding off on rate increases in past months despite improvements in the labour market and other area of the economy. | The stubbornly low inflation has been citied by the Fed as a reason for holding off on rate increases in past months despite improvements in the labour market and other area of the economy. |
| Construction | Construction |
| Mr Dudley said the US central bank needed to watch "the broad supports for the economy" and how inflation played out "in the coming months". | Mr Dudley said the US central bank needed to watch "the broad supports for the economy" and how inflation played out "in the coming months". |
| Other data out Tuesday, painted a more positive picture of the US economy. | Other data out Tuesday, painted a more positive picture of the US economy. |
| Construction of new homes in July rose at its fastest rate in nearly a year, boosting hopes that the economy may be picking up in the third quarter. | Construction of new homes in July rose at its fastest rate in nearly a year, boosting hopes that the economy may be picking up in the third quarter. |
| The Commerce Department said total housing starts rose 2.1% from June to an annual pace of 1.21 million units, the strongest jump since June 2015. | The Commerce Department said total housing starts rose 2.1% from June to an annual pace of 1.21 million units, the strongest jump since June 2015. |
| The increase appears to be led by growth in apartment building in the northeast US. Year-to-date construction is up 6.7% from the same period in 2015. | The increase appears to be led by growth in apartment building in the northeast US. Year-to-date construction is up 6.7% from the same period in 2015. |
| In another sign of market strength, industrial output climbed 0.7%, beating analysts expectations. Overall industrial output measures factory, utilities and mining production. | In another sign of market strength, industrial output climbed 0.7%, beating analysts expectations. Overall industrial output measures factory, utilities and mining production. |
| "The strong housing starts and industrial output performance will bolster the Fed confidence that growth momentum has rebounded, potentially supporting the bias for a near-term hike," said Millan Mulraine, deputy chief economist at TD Securities in New York. | "The strong housing starts and industrial output performance will bolster the Fed confidence that growth momentum has rebounded, potentially supporting the bias for a near-term hike," said Millan Mulraine, deputy chief economist at TD Securities in New York. |
| "Nevertheless, with inflation continuing to miss to the downside, the case for caution remains strong." | "Nevertheless, with inflation continuing to miss to the downside, the case for caution remains strong." |