Thu, Jun 25 2009, 07:29 GMT
by Joseph Trevisani
No change in rates, no change in economic outlook, no additional quantitative easing and no liquidity exit from the Fed. Four negatives in the the FOMC statement but only one seemed to register with the currency market, no additional quantitative easing. Treasury rates moved modestly higher and the dollar rallied. The FOMC "expects that inflation will remain subdued for some time", and "that economic conditions are likely to warrant exceptionally low levels of federal funds for an extended period". Even if this FOMC statement would have been an unlikely occasion to announce further quantitative easing as the initial program is incomplete, relief that the monetization status quo remains intact is the most ready rationale for the improvement in the dollar.
Published on Thu, Jun 25 2009, 07:30 GMT
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