Speeches by Fed governors Janet Yellen and William Dudley indicate that the dovish governors at the fed still consider the current inflation pressures as temporary and will probably keep monetary policy very loose. This is more of a confirmation that the fed might prefer to stay behind the curve on inflation. They think the risk to the economy is higher if they tighten too soon rather than risking higher inflation. I think this implies when they finally do start tightening it will be late and they might have to tighten more rapidly at that time. This become a longer term issue and I am not sure of the timing how it will play out. So for now I am no longer considering putting on that TBT trade.
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