``Doubtless, the Fed will be accused of having to raise rates because of the ECB's rate increase. The reality is that the Fed will have known about the ECB's rate increase well in advance and has been prepared to abandon ZIRP at the appropriate time. A virtue can be made from a necessity: the end of ZIRP will act as a passport for the Fed to continue with quantitative easing programmes, because even with a rise in Treasury yields, no one else is going to fund Obama's deficit. The Fed's monetary policy will come into line with the ECB's: raise interest rates as little as possible, while bailing out both government and the banks through the banking system. And above all, pray.''

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