The Dow soared to a new all time high above 14,000 taking carry trades and other high yielding currencies up with it.

The rise in commodity prices and the fall in the US dollar are putting upside pressure on inflation.

Sales of new and existing homes dropped and the median prices of homes sold also fell, and collectively the figures provide strong evidence that the US economy is in trouble.

The Federal Reserve has often resorted to lowering interest rates to get the economy out of a financial crisis, but easier monetary policy is exactly what has been blamed for creating the bubble that we have now.

The US dollar fell to a new all-time low against the Euro on the back of continued deterioration in the US economy. Traders and investors are selling dollars as the outlook for consumer spending becomes bleaker.

Dallas Fed President Fisher indicated that the recent trend of inflation gives the Fed wiggle room, which suggests that they could ease monetary policy further.

None of the US economic releases next week are market-moving enough to shift the overall trend in the financial markets. The US dollar may use this opportunity to lick its wounds.

For months, the currency market has been obsessed with 1.40 in the Euro and 1.0 in USD/CAD. Now that these targets have been achieved, the question ahead of us is how much further can the Euro rise.

The Federal Reserve’s interest rate decision has made a substantial impact on the financial markets, and the consolidation today indicates that traders are asking, What’s Next?

The Greenspan put has now become the Bernanke put. This term was coined back in 1998 when Greenspan bailed out the financial markets by lowering interest rates after the collapse of Long Term Capital.