Flash: Is September still a realistic tapering timetable? – Investec

FXstreet.com (New York) - Bernanke’s speech was the key driver for an aggressive dollar sell off overnight after he stated that if financial conditions tightened too far i.e. US interest rates rose too high the Fed would ‘push back’, notes Lee McDarby, Corporate Treasury at Investec.

In addition, he commented that highly accommodative monetary policy for the foreseeable future is what’s needed in the US economy. “The significance of these comments is that while September may still be on for the start of tapering there is a greater risk that this is delayed. These comments came in the aftermath of relatively neutral FOMC minutes in which the major point of note was that concerns were expressed that inflation was slowing, which could also delay tapering.” McDarby adds.