The markets are getting a new look at “just one more” view from the Federal Reserve on the timing of the interest rate hike cycle. Stanley Fischer, Vice Chairman of the Federal Reserve, gave another look that the interest rate hike cycle is not assured to start in September. The markets reacted due to some economic strength comments from Fischer, but the reality is that you could have interpreted Fischer’s comments either way.

The news came on a CNBC interview from the symposium in Jackson Hole, Wyo. This was the most important Fed governor discussion to pay attention to because Chairman Janet Yellen was not in attendance at this week’s key Fed event.

The first signal made was that it remains too early to decide on whether to raise rates in September, with the most market turmoil. The second reminder was that raising rates would come very gradually, to 25 basis points, then gradually to 50 and so on.

The quote given on CNBC was:

I think it’s early to tell. The change in the circumstances which began with the Chinese devaluation is relatively new and we’re still watching how it unfolds, so I wouldn’t want to go ahead and decide right now what the case is — more compelling, less compelling, etc.

Fischer mentioned that the spillover from China most likely would remain relatively small. Still, he admitted not fully understanding the recent market volatility and noted that it can of course make a difference on when to or not to tighten. He further said:

We’ve got a little over two weeks before we make the decision. And we’ve got time to wait and see the incoming data, and see what is going on now in the economy.

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The charts (from Yahoo! Finance) for the Dow Jones Industrial Average and the U.S. dollar against the euro will show the volatility increasing around Fischer’s commentary.

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