A "necessary condition" for rate hikes, says Minneapolis Fed boss Kocherlakota, needs to be a one-to-two year inflation outlook at 2% or more, and he currently sees the probability of this happening as "considerably lower" than the chance of inflation coming in below target.
Willing to have inflation run at above 2% for some time to help employment, Kocherlakota says it's kind of a moot point for now since inflation is running so low.
As for employment, the headline stats are masking a still-weakish situation. The decline in unemployment has much to do with lower labor force participation, and thus the Fed is failing to meet its job creation goal.
The minutes of the most recent FOMC meeting are due at 2 ET.