The Fed fires its last bullet…  Euro breaks back above $1.40…  AUD and NZD rally…  And Now… Today’s Pfennig!

A Santa Rally for the currencies?…  Waiting for the FOMC…  AUD and NZD rally…  China to try and keep growth above 8%… And Now… Today’s Pfennig!

FOMC to cut further…  Bernanke turns his back on inflation…  Kiwi and Australia rally…  Gold continues to shine… And Now… Today’s Pfennig!

It took the statisticians of the National Bureau of Economic Research almost a year to confirm what the rest of us already knew, that the US registered a significant decline in economic activity, thus officially entering a period of recession.  While I am pleased that the members of NBER take their duties seriously, thereby ensuring that they don’t leap to any hasty conclusions, I only wish that similar moderation could be displayed by their colleagues at the Fed and the Treasury.

With the benchmark Federal Funds rate already down to 1.0%, U.S. Federal Reserve Chairman Ben. S. Bernanke has only so much room for another cut (although many economists are predicting an additional half-percentage-point cut at the Dec.15-16 meeting).

Japanese yen rallies…  Renminbi stumbles…  A very tough data week in store…  Rate cuts all around the world… And Now… Today’s Pfennig!

Federal Reserve policymakers yesterday (Wednesday) reduced the benchmark Federal Funds rate to 1.0%, an aggressive half-percentage-point cut that central bank Chairman Ben S. Bernanke’s latest attempt to keep the widening financial crisis from tipping the world into a global recession.

Lets face it, the era of easy money and cheap oil has come to an end.

Eurozone inflation measured 3.7% year-on-year in May, the highest rate for 16 years, reports Bloomberg. This increases the likelihood of an interest rate hike by the ECB in July, putting more downward pressure on the US dollar.

Money Morning’s William Patalon III discusses how rising inflation is dominating the news on both sides of the Atlantic:

Undoubtedly, a universal theme is emerging at the Fed and other world central banks: Inflation, Inflation, Inflation.

Investors better keep an eye on bonds this week.While the stock market may be more fun to follow, fixed income is often a stronger gauge of investor expectations of the economy, future U.S. Federal Reserve policy, and inflation.