Flash: Fed direction looks rudderless - DBS Group

FXstreet.com (Barcelona) - DBS Group analysts ask, “Why talk about when you’re going to turn left if your next turn may be to the right?”

They note that that’s what New York Fed President Dudley effectively asked yesterday when he said he didn’t know if the Fed’s next move would be ‘up or down’ ie. to increase QE3 or to taper it back. They see that everyone’s asking when the tapering might come (and what it will depend on), but they see that the Fed’s FOMC statement of three weeks ago told investors not to get the cart in front of the horse meaning that the next move could very well be for greater QE, notless. They write, “Dudley’s point yesterday was surely to remind investors of that fact, and to pave the way for Bernanke, who will likely remind them once again today when he testifies before Congress on the economic outlook.”