Goodbye September rate hike. From the much anticipated Dudley Q&A:

DUDLEY: CASE FOR SEPT RATE HIKE LESS COMPELLING

DUDLEY:INTNL DEVELOPMENTS TIGTHEN FINL CONDNS, MAY HURT ECON

DUDLEY: RATE HIKE CASE COULD BE MORE PANICKY BY SEPT FOMC

DUDLEY SAYS INTL DEVELOPMENTS HAVE RAISED DOWNSIDE RISKS

10:36 08/26 DUDLEY: HAVE TO CONSIDER INTNL DEVELOPMENTS; CAN AFFECT ECON

Transitory:

DUDLEY: EXPECTS DOLLAR, OIL EFFECTS TO BE TRANSITORY ON U.S. INFLATION

On inflation:

DUDLEY: LOW INFL APT TO BE TRANSITORY

Because it is only a matter of time before the money paradrops begin?

DUDLEY: US DATA GOOD, BUT CAN'T JUST LOOK AT DOMESTIC DATA

Yes, have to also look at domestic stocks. Oh but wait:

DUDLEY: I DON'T HAVE A VIEW ON WHY THE STOCK MARKET IS DOING WHAT IT IS DOING

DUDLEY: STOCK DROP HAS LITTLE S-TERM EFFECT ON U.S. ECON

And the punchline:

DUDLEY: I REALLY HOPE WE CAN RAISE RATES THIS YEAR

But the markets won't allow us.

TSYs jumping on the news, USDJPY dumping on USD weakness with stocks shocked, and waiting until the algos reverse the correlation trackers so tthey can push stocks higher on a weaker dollar, resulting from this latest admission of Fed policy failure.