David Long

QE Ends and the Fed gets Bullish

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Forex Market News

As expected in this little part of the world (apparently a surprise in the States) the US Fed finished up the QE program and showed decidedly hawkish view (bullish interest rates) on the economy.

So when will the rates rise?

Now that the QE is over, all eyes will be on the language in the statements moving forward. The Fed has stated many times that it is data dependent, being jobs and inflation. The Feds own dot system is well in advance of the market and are looking at June 2015 whilst the market money is still in October 2015.

Jobs & Inflation

The job target Aunty Janet is gunning for is full employment. This is not 0% but in a band of 5 to 5.5% unemployment and going from current trend (last read was 5.9%) that is likely to be hit in first quarter 2015. Inflation target she wants is 2% and core CPI currently sits at 1.7%.

So, the rate rise in the US is closer than what most in the US think. And the bullish greenback is back in the table, with a vengeance today. And here is a read from the worst Fed chairman of all time, the man who started it all and is the Pied Piper to Bernanke and Yellen, the one and only, Captain-bloody-obvious Greenspan!

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