The US job market is nearly at full strength and the pace of interest rate increases by the Federal Reserve will depend on how well the economy is doing, says Fed Vice Chairman Stanley Fischer.
In an interview with Bloomberg TV on Tuesday, Fischer did not comment on the timing of the next Fed rate hike but said "we choose the pace on basis of data", and that US "employment is very close to full employment".
Fed Chair Janet Yellen said on Friday she thought the case had grown stronger in recent months for an interest rate increase, remarks Fischer later that day said were consistent with a view that the US central bank might raise rates at its next policy meeting in September.
Asked about the dollar on Tuesday, Fischer said the currency's strength affected US inflation and company profits but improvements in the labour market showed the economy had withstood this headwind.
The Fed has signalled since March it would lift rates twice this year, but investors have been skeptical.
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Prices for Fed funds futures on Tuesday suggested they expect about a 20 per cent chance of a hike next month and just over even odds for such a move in December. The Fed also has a policy meeting scheduled for early November.
The US Labor Department's monthly employment report on Friday is expected to show the economy added 180,000 jobs in August, according to the median forecast in a Reuters poll.
