Where now for the Fed as 'political interest will play out immensely'?

The White House will have power to appoint governors

The semi-annual testimony of Federal Reserve chairman Janet Yellen was mostly descriptive, consensual and in one word - boring, but the next events will be more interesting to observe, writes Seilern Investment Management CIO Raphael Pitoun.

First, it confirms that long-term inflation expectations have been stable. Whether you look at it from a consumer or business perspective, the rate seems to be stuck at between 2% and 2.5%.  Secondly, the Federal Reserve insists on the fact that market-based inflation expectations tell a different story. Both the TIPS and inflation swaps are heading north.  Thirdly, the Federal Reserve perceives the level of systemic risk in the financial system as globally moderate, despite the increase in mortgage rates. It notes banks remain well capitalised and even if the equity market reached ne...