For Federal Reserve policymakers championing a rate increase this autumn, the pieces were falling neatly into place. Then the China-induced squall struck.
Now as senior Fed figures gather in Jackson Hole, Wyoming, for their annual symposium, market gyrations and the potential for a sharp downturn in China, by some measures the world’s biggest economy, have put widespread expectations for a move next month on ice, and some economists are questioning whether a rise will happen in 2015 at all.
William Dudley, the New York Fed president, argued on Wednesday that the case for September had become “less compelling”, even if he was ruling nothing out. Esther George, the hawkish president of the Kansas City Fed, which is arranging the meetings, agreed that the Fed had to tread cautiously.