Today at 2pm was a much-anticipated FOMC meeting with about 50% of Wall St Economists expecting the Fed to raise rates by 25bps for the first time in almost 10yrs. Low and behold, they did not.
Here is a simple explanation why they didn't, and more importantly, why they won't for way longer than people think: Every nation on earth (save for the USA) has been devaluing their currencies to export their own deflation to the USA. And the the U$ has strengthened by about 15% YTD, which has the affect of tightening monetary conditions in the USA on it's own...who needs to Fed?! So the Q becomes, is the USA economy strong enough to import all of this deflation from all of these nations around the world, and turn it into inflation??
Answer--> we think not.