Federal Reserve and Monetary Policy: “You don't say. Is that right”.

Three Federal Reserve officials saying the same thing: “inflation is contained”.
“It is difficult to explain what has happened to rates. I think the credibility of monetary policy is an aspect," said Pianalto.

Here something to mull over, the 2 year note is lower. Some bond traders think that the Federal Reserve is going to “STOP” raising the fed funds rate. Are they worry about the removal of the carry trade? Is this a flight to quality?

The currency wars continue. The dollar strengthen against the Euro one day because Germany's investment survey came out with a number very far below consistence (“it fell off a cliff”). This raised expectations that EU central bank will lower interest rate.

The next day, the dollar weakens because the PPI data shows that inflation is contained. This information lowers the expectations that the Federal Reserve will not increase the fed funds rate at a faster pace.

It comes down to whether the US can control the ever widening trade and US government deficit.