by Greg Canavan, Daily Reckoning.com.au:
Everyone thinks the US Federal Reserve controls the market. But really, the market controls the Fed. That’s certainly the impression we got after reading New York Fed President Bill Dudley’s speech, given at the Japan Society in New York last night.
If Dudley’s thoughts are anything to go by, then the Federal Reserve is terrified of normalising interest rates and upsetting the market…the market being the hoard of speculators who have grown very fat and comfortable from the Fed’s monetary largesse.
Trying to distance themselves from talk of monetary tightening over recent months, the Federal Reserve is now set on telling the market — in a roundabout, qualified sort of way — that tightening is a long way off.
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