The US Fed has put itself in a most interesting situation with the combination of promising a massive expansion of its balance sheet while also linking Fed rates to key economic variables of the unemployment rate and core inflation. Considering the demographic structure of the US (a swell in retiring baby boomers), the unemployment rate could continue to decline rapidly in 2013 and have the market projecting a 6.5 percent rate by some time in perhaps mid-2014 even on marginal improvements in payrolls. Meanwhile, core inflation in the US is only about half of one percent from the Fed threshold. Fiscal restraint from the US (for the first time), the reshoring phenomenon, Fed thresholds hampering further easing for some time, and the return of market volatility will mean that a more durable recovery in the US dollar will begin in Q1, and a fairly broad one at that.