Market expectations for rate hikes in 2016 too low, Fed's Fischer says

Rate-setters Stateside don’t know enough at the moment to gauge how many interest rate increases will be necessary this year, but they think that market expectations for just two [25 basis point] hikes in 2016 “is too low,” the central bank’s number two policy-maker said.

In an interview with broadcaster CNBC, US Federal Reserve Vice-Chairman Stanley Fischer said four rate hikes, in keeping with the projections submitted by the members of the Federal Open Market Committee at their last meeting, were more “in the ball park”.

"We don't know enough now to know how many [rate hikes] there will be."

"We watch what the market thinks, but we can't be led by what the market thinks."

Commenting on the headlines driving market action, Fischer said he was unsure about the long-term impact of Wednesday’s H-bomb test by the North Korean dictatorship.

The concerns about the slowdown in China were perhaps more significant.