The Fed Vice Chairman Stanley Fischer said on Thursday that inflation in the U.S. should rebound next year as the effect of a stronger U.S. dollar and low energy prices will fade.
"Some of the forces holding down inflation in 2015--particularly those due to a stronger dollar and lower energy prices--will begin to fade next year. Consequently, overall PCE inflation is likely on this account alone to rebound next year to around 1-1/2 percent," he said.
Fischer pointed out that the interest rate hike in December is possible, but it will depend on the incoming inflation and employment data.
"The October 2015 FOMC statement indicated that it may be appropriate to raise the target range for the federal funds rate at the next meeting in December, though the outcome will depend on the Committee's assessment of the progress--realized and expected--that has been made toward meeting our goals of maximum employment and price stability," he noted.