By prolonging its policy of targeting interest rates at zero, the Federal Reserve spared the country from half or more of the damage to the U.S. economy that would have followed the steep rise in the dollar over the past year, Fed Vice Chairman Stanley Fischer said Thursday evening.

"The U.S. economy appears to be weathering those shocks reasonably well," Fischer said, speaking at an event at the Fed's Board of Governors in Washington. "Monetary policy has played a key role in achieving these outcomes through deferring liftoff relative to what was expected a little over a year ago."

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Fischer also noted that "it may be appropriate" to finally raise rates at the Fed's December meeting, although events could intervene over the next month to dissuade members of the monetary policy committee from doing so. Investors now expect that the Fed will raise rates from zero in December for the first time since the financial crisis.

Part of the delay in raising rates this year has been the effects of a roughly 15-percent increase in the value of the dollar. Fischer attributed the rise to the U.S. economy gaining strength at the same time that countries overseas, especially China, have faced the prospect of slowing growth. At the same time that the Fed has been moving toward tightening monetary policy, other countries' central banks have sought to loosen, resulting in a strengthening dollar in addition to plunging commodity prices, especially oil.

Because of those developments, Fischer noted, U.S. manufacturers have seen their exports slow. U.S. oil producers also have been hurt. Without monetary easing, Fischer estimated, the dollar could reduce economic output by 1.5 percent over three years.

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