By Far, This Is The Most Important Thing That Happened All Week

If there is one takeaway from this week, it has to be the sharp turn in Fed expectations.

A slew of Fed governors basically confirmed that QE3 is dead, barring something totally unexpected.

Fed Governor Jeffrey Lacker is the latest to say this, but others have said so as well. Yesterday is was Kocherlakota. Earlier in the week it was Bullard.

While QE3 always seemed like something of a longshot, if only for political reasons — QE2 has been wildly unpopular and bad for the Fed’s standing — this is the week it took hold.

The easiest way to visualise this is to look at the dollar.

It had a big week, rallying sharply against the yen. Today gold is getting drubbed on the jobs data and the Fed commentary.

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