Any hopes that the Federal Reserve will take a more internationalist stance and back away from an aggressive monetary policy to help soothe currency tensions are unlikely to be fulfilled. The Fed remains committed to supporting the domestic economy and will maintain the current rate of bond purchases. On domestic grounds, however, there is a strong case for the Fed to signal greater flexibility, inject some doubt and signal a willingness, if necessary, to slow quantitative easing within the next few months. Bond markets would fall, but it would help lessen the growing threat of a much more destabilising sell-off ... (full story)