- Fed should hike to 1% by end of summer(!)
- Should drop extended period vow
- should move from 1% to above 3% relatively quickly
- Should sell MBS by the time it raises above 1%, if not sooner.
- Data suggests recovery is broad-based, self-sustaining, perhaps stronger than anticipated
- Clear signs job creation taking hold
- European debt situation fluid, a reason for Fed caution
- Low inflation for the next year drift higher as recovery picks up.
KC Fed chief Hoenig refuses to drink the Kool Aide being consumed by his compatriots on the FOMC, He is way out there on a limb, all alone,calling for fast, aggressive rate hike and asset sales. It must be lonely out there…
If Bernanke had said any of this we would be at 1.18 EUR/USD, but since it is Hoenig, the sole dissenter these last several FOMC votes, expect little market reaction.
