Last night’s meeting of the Federal Reserve saw US FED chair Janet Yellen set an overly dovish tone on the trajectory of US monetary policy. Markets pushed aside her comments on possibly shrinking the $4bn FED balance sheet as soon as September and instead chose to latch onto her acknowledgement that core US inflation targets were remaining softer than expected. This acknowledgement sent a message to markets that a 3rd rise in the US base rate might not happen this year. The S&P, Dow, and the Nasdaq all responded to the news by closing yesterday’s trading near new highs whilst the dollar fell to a 14 month low on the news. Whilst a 3rd rate hike is not off the cards the FED has sent a clear message that any remaining rate hikes for the year will be very much data dependant.