Wednesday, April 27, 2011

What Happened To All The Fed Hawks?


Where did all the Fed hawks go? No Fed members voting against the current policy, what happen to all the hawkish talk. I guess that's all it was, talk. And the reason for the talk was the USD was in danger of falling off a cliff. As you can see from the chart above, the hawks were trying to make sure that the supporting trend line would hold. So by talking tough and hawkish they were able to shake off the speculators who were jumping on the short side. Remember, all that the Fed and the government want is a controlled or orderly decent in the USD not a waterfall decline. Now that support has been violated, expect more USD weakness on the way, at least until the end of QE2 at the end of June.

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