Fed Faces Conundrum on Eve of FOMC Policy Meeting

The transcript discusses the market's expectations of the Federal Reserve's rate hikes and the subsequent disagreements on future actions. It highlights the tension between financial conditions loosening and economic data softening, with references to indices from Citigroup and Bloomberg. The global context is considered, noting significant bond purchases by the Bank of Japan and the ECB, and the potential impact on yields. The Fed's challenges in tightening financial conditions are explored, alongside debates on Wall Street regarding financial indicators and the yield curve's implications for the economy.

How does the divergence in monetary policy between the US and other central banks affect the market?

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What are the potential consequences of the flattening yield curve as discussed in the text?

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