Division between those on the committee who have moved to expand QE (Posen), and those who want to raise rates (sentance) is becoming more noticeable. Earlier this week, Sentance expressed concern about the falling confidence in the Monetary Committee of the faith that the committee "has become tolerant to higher inflation." Comments in the German Handelsblatt yesterday from Posey, again suggested the need for further incentives to avoid repetition of the 1930's. Meanwhile, another member (Tucker) was on the side of the sentance, saying, Daily Mail, that he was "more balanced" against inflation. While the markets continue to believe that the continuation of QE for the U.S. followed by Britain, the inflation picture, as well as inflation expectations suggest otherwise. Despite the looming fiscal consolidation is not so likely, as expected markets.
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