We now expect the annual core CPI inflation rate to decline only modestly this year, from 2.3% in May to slightly below 2.0% by year-end, before falling more markedly next year to 1.5% by end 2013.

In the end, the Fed opted to extend its Maturity Extension Programme (aka Operation Twist) for another six months, but there was no new large-scale asset purchase programme (QE3). Nevertheless, the...

Chairman Ben Bernanke recently appeared to play down the need for more action from the Fed, arguing that the extent of the US slowdown may have been "exaggerated". Looking at the pattern of the...

Unless the economy loses a lot more momentum or the eventual financial contagion from the crisis in Europe is much greater than we expect, the Fed is unlikely to launch a third round of asset...