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Fed minutes to the last monetary policy meeting published today at 19.00 were on the dovish side. Members stressed that we were not faced with a new inflationary world in which several more rate hikes were needed and that future rate rises were heavily data dependent. The committee was very mindful of not overshooting especially given the risk of a decelerating housing market. House prices were discussed at length by the committee.

Not surprisingly US bond yields have fallen in response and the dollar is weaker and gold higher at 622 currently. 621 was a key level.

CPI inflation data in the US tomorrow is crucial.

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Fed minutes to the last monetary policy meeting published today at 19.00 were on the dovish side. Members stressed that we were not faced with a new inflationary world in which several more rate hikes were needed and that future rate rises were heavily data dependent. The committee was very mindful of not overshooting especially given the risk of a decelerating housing market. House prices were discussed at length by the committee.

Not surprisingly US bond yields have fallen in response and the dollar is weaker and gold higher at 622 currently. 621 was a key level.

CPI inflation data in the US tomorrow is crucial.

I recommend the very interesting broadcast interview (Financial Sense Online) with Russell Napier about his book "Anantomy of the Bear". One of the points that emerged for me (though it wasn't put quite this way by JP or RN) was how the memory 1929 weighs on the brain of the Fed like a nightmare. The big historical fear is still deflation and there is, at the moment, a tendency to be cautious, erring in the direction of inflation when in doubt. The problem has been that this caution can turn into to panic and overdoing it when inflation keeps pushing through despite rate hikes. The Fed has currently to walk a very narrow line and the chance of a wrong move seems very high.

Edited by New Bear
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