Importantly, he doesn't believe we need inflation to heat up to a 2% pace for the Fed to start tightening monetary policy with interest rate hikes.

That's the takeaway from the Fed's vice chairman, who spoke on Saturday during a panel at the Kansas City Fed's Economic Symposium in Jackson Hole, Wyoming.

This is critical information from a Fed insider as the global financial markets try to figure out when the Fed will begin to hike interest rates.

For a while, the consensus was that the economy was strong enough to absorb an initial rate hike from the Fed in September. But the recent spike in market volatility and the plunge in inflation expectations exacerbated by tumbling oil prices suddenly had people wondering if a rate hike would be appropriate considering it would theoretically exert even more pressure on prices. And price stability is one of the Fed's mandates.

"Given the apparent stability of inflation expectations, there is good reason to believe that inflation will move higher as the forces holding down inflation dissipate further," Fischer said on Saturday.