The Fed has done its best to propagate confusion recently, first surprisingly markets on the highly dovish side in March – cutting the near-term real rate well into highly expansionary territory, prompting inflation overshooting speculation as well as discussions about a new Shanghai accord. As a result, the lower US real rate year-to-date has helped reflation trades perform, and has bought emerging markets – which fear spill-overs from Fed policies - some time. Elsewhere hints from ECB (Praet) and BOJ (Nakaso) that rates could indeed be cut further is undermining the G20 "Shanghai accord" interpretation of recent policy moves ... READ MORE
