Vanilla's the flavour

Interest rates

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The interest rate cuts implemented by the US Federal Reserve since September, although hardly unexpected, surprised some by their sheer scale. A sizeable 125 basis points was shaved off the Fed funds rate in January alone, following on the back of three previous reductions totalling 100bp at the tail end of 2007.

Intended to inject some much-needed vigour into the stuttering US economy and forestall recession, the cuts have caused a dramatic steepening in the US dollar yield curve, which had bee

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