FXStreet (Córdoba) - Federal Reserve Vice Chairmen, Stanley Fischer, spoke today in New York about the economic outlook and monetary policy. He said that the FOMC doesn’t know what they will do at the next meeting. Regarding inflation, he explained that it will likely remain low for a longer time than previously expected because of the decline in crude oil prices and the appreciation of the US dollar. He mentioned again that the Fed expects rate hikes to be gradual and that four rate hikes is among the number being talk about, but the trajectory of rate is not predetermined and it depend on data. Key Quotes: “Our decision in December was based on the substantial improvement in the labor market and the Committee's confidence that inflation would return to our 2 percent goal over the medium term." “Once these oil and import prices stop falling and level out, their effects on inflation will dissipate, which is why we expect that inflation will rise to 2 percent over the medium term, supported by a further strengthening in labor market conditions. “Given the large size of the Federal Reserve's balance sheet, the FOMC is employing new tools to implement monetary policy. In particular, to raise the federal funds rate we increased the interest rate we pay on reserve balances that depository institutions hold at the Federal Reserve. We also employed an overnight reverse repurchase facility, through which we interact with a broad range of firms to help provide a soft floor for the federal funds rate consistent with our target range.” “Economic data over the intermeeting period suggested that improvement in labor market conditions continued even as economic growth slowed late last year. But further declines in oil prices and increases in the foreign exchange value of the dollar suggested that inflation would likely remain low for somewhat longer than had been previously expected before moving back to 2 percent” “In addition, increased concern about the global outlook, particularly the ongoing structural adjustments in China and the effects of the declines in the prices of oil and other commodities on commodity exporting nations, appeared early this year to have triggered volatility in global asset markets. At this point, it is difficult to judge the likely implications of this volatility. If these developments lead to a persistent tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the United States.” “Now, I expect that in a few minutes one of you will ask not about what we did at our last meeting, but rather what we are going to do at the next one. I can't answer that question because, as I have emphasized in the past, we simply do not know.” For more information, read our latest forex news.