Zero rate policy comes with a cost

ON Oct 28, the Federal Reserve's Federal Open Market Committee provided a statement that while broadly in line with prior communications, provides some additional hints at the Committee's thinking on initial rate lift-off.

Specifically, the Fed maintained its focus on external "global economic and financial developments", which was a phrase introduced in the September statement, despite some key Committee members appearing to temper that concern in recent speeches.

In any event, global financial conditions appear to have stabilised somewhat since late summer.