Former Fed markets chief (and very smart guy) Dino Kos says he does not see the FOMC raising rates this year. Rising bond yields are more a reflection of normalizing markets than inflation fears, he says while the inflation outlook is dampened by the absence of credit expansion by the banks. He sees growth in the 1-2% range next year, according to Reuters.
Risk aversion is is ebbing this afternoon, helping underpin the reflation trade. Oil is $1.50 off its lows, stocks are up 0.5% and EUR/USD has worked its way to fresh highs at 1.3945 as stops above 1.3930 were triggered.
