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It was meant to be all about the Federal Reserve but the latest reading on inflation stole the show.
At first glance it all followed the script when the Fed raised interest rates as expected early on Thursday morning, but by the time it was all announced financial markets had already moved on.
Instead of buying the US dollar and selling bonds, traders ditched the greenback and bought bonds after another soft reading on the CPI, that was released before the Fed's announcement.
Bond traders are betting that Janet Yellen, chairman of the Fed, won't be hiking rates like she thinks she will.
It's why the Australian dollar is flirting with US76¢ compared to US73.75¢ at the start of June.
The Reserve Bank won't like the $A up at that level and are no doubt hoping the Fed and higher interest rates will get the currency lower, not higher.
But another report showing that prices are falling in the US has changed that.
It's one reason why Yellen spent so much time explaining that the latest low reading in inflation was down to the quirky nature these days of cheap mobile plans and some prescription drugs.
The problem with that line is that a range of other items like rents, clothes, cars, and airfares are also getting cheaper and it keeps dragging inflation lower.
It didn't help that the latest report on retail sales was also on the weaker side although some upward revisions to the previous two reports helped stem the damage on that front.
The Fed still thinks it will hike rates one more time this year and three more in 2018, but there's no doubt the recent run of weak inflation has rattled some officials.
It was no coincidence the accompanying statement had a line or two that warns although "near-term risks to the economic outlook appear roughly balanced", "the [FOMC] is monitoring inflation developments closely".
Despite slightly tweaking its median forecast for core PCE inflation, it's favoured measure of prices, to 1.7 per cent from 1.9 per cent, it still forecasts a rebound to the 2 per cent target as early as next year.
It makes watching the data over coming months vital to the Fed's next move because most expectations of higher inflation are linked directly to President Donald Trump's fiscal stimulus package.
Time is now ticking on the details of that package that was meant to come through in the next few months so it can have an impact on economic growth and inflation in 2018 and beyond.
Financial markets thought it would be sooner than later and that's why bonds were ditched, shares snapped up and the US bought when Trump was first elected.
But now it's a case of later rather than sooner so the risk is traders get nervous and start to price out any of the good news that flowed from any fiscal stimulus package.
That implies three hikes will be unlikely next year and the peak in the Fed Funds target rate could be lower than what financial markets have been thinking.
If that's the case it suggests the Australian dollar could keep rising.
If there is a decent drop in the US unemployment report then it might prompt the Fed to hike twice this year and perhaps four times in 2018.
But there are a few obstacles and that includes getting the debt ceiling raised without too much fuss and making sure the tax cuts are passed in the early part of 2018.
Read more: http://www.afr.com/markets/falli ... wrezp#ixzz4k1zB9H68
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断篇儿-迁徙 (今天有点忧伤） (2012-8-10) bosstong 
【直播结束】来和我一起见证被妈妈遗弃的小鸡的出生吗？(第14页新增坚强光屁屁照！18+) (2010-11-16) 七朵花 
楼主:bondzh
发表于 2017-6-15 11:42
) to switch to MYX this time
。