With the market now firmly believing a pause is in order, lets quickly recap how credit markets (specifically the yield curve) reacted over the past month to Mr. Bernanke's "strong dollar" statement.
June 2nd "Strong Dollar":
The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation. We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of an erosion in longer-term inflation expectations.
June 13th Peak / June 16th: Fed "speaks" to Sudeep Reddy?