US Federal Reserve

Aside from the general hawkish tone in yesterday's FOMC minutes, the one line that caught traders' attention in the Fed report was the following:

Some members expressed concern that the likelihood implied by market pricing that the Committee would increase the target range for the federal funds rate at the June meeting might be unduly low

• Fed Puts June Rate Increase on Table Provided Economy Says Go (BBG)
• European shares drop as mining stocks weaken, airlines fall (Reuters)
• Oil drops below $48 on Fed hike speculation, fading support from outages (Reuters)
• Violent Struggle Over Oil and Money Rattles Global Energy Market (BBG)
• Bayer Proposes to Acquire Monsanto (WSJ)
• How Wall Street Led LendingClub Into Crisis (BBG)
• Fewer Shareholders Pay U.S. Taxes on Dividends (WSJ)
• Turkey to miss end-June deadline for EU visa-free travel (Reuters)

Just as we warned was probable, The PBOC sent a message loud and clear to the newly hawkish Fed following today's surge in the dollar after the minutes were released. With the 2nd biggest daily devaluation since the August collapse, China pushed the Yuan fix against the USD down to its lowest since early February - barely above the January lows.

The non-linearity of inflation psychology and the present danger of stagflation

Submitted by John Butler at GoldMoney Inc. The full report can be accessed here. 

Introduction

Submitted by Jeffrey Snider via Alhambra Investment Partners,