Following the Federal Open Market Committee meeting yesterday where, as widely expected, the Fed Funds target was kept unchanged at 1.25 per cent, members noted that inflation was still below their 2 per cent target – as it has been for the last five years – and core inflation is running at 1.4 per cent. Admitting they could tentatively start reversing QE as early as September, in reality this is wide open and would merely involve not re-investing proceeds of bonds that had matured.
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