• In the US money market there’s plenty of fodder for speculating about where rates will be 12 to 18 months from now. As we discussed in last Wednesday’s Comment, such speculation revolves around the Fed making another hawkish turn. Bringing forward not only the start of the tapering of QE, but also the timing for the first rate hike. Since the monetary policy stance is incredibly easy and since the Fed is far, far removed from a neutral policy stance, the economy might remain hotter for longer. And that would justify another June-like pivot. We’re not making any calls here though. Just trying to find method to the madness.



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