Don’t expect the Fed’s ZIRP experiment to be short-lived says Atlanta Fed’s Lockhart. Rates can stay very low for the for a good part of 2009 or longer. He says he is not concerned about deflation at the moment but that the Fed can grow its balance sheet via long-term securities purchases to counter deflation.

EUR/USD is ticking up as the market digests the idea of zero rates as far as the eye can see. It trades now at 1.3415. Expect stops above 1.3450.