We've seen the
US Fed wind back the amount of money it has been magically printing from $85
Billion a month to $35 Billion a month since December last year and in
Wednesday’s monthly minutes the Fed said,
"Participants
generally agreed that if incoming information continued to support its
expectation of improvement in labor market conditions and a return of inflation
toward its longer-run objective, it would be appropriate to complete asset
purchases with a $15 billion reduction in the pace of purchases in order to
avoid having the small, remaining level of purchases receive undue focus among
investors. If the economy progresses about as the Committee expects, warranting
reductions in the pace of purchases at each upcoming meeting, this final
reduction would occur following the October meeting."
This should be
around the same time financial markets begin to factor in higher interest rates
in the US in the coming 12 months as usually the speculation rally begins 12
months out from when the rates actually go up.
The US Dollar
didn't get a boost from this news overnight but if the economic data continues
to improve it will only be a matter of time.
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