So what was more important? Was it the 0.25% cut in rates by the US Fed, to 4.5%, the fall in the US dollar, the rise in the Aussie, the surge in gold over $US800 an ounce, or the jump in oil prices past $US95 a barrel in after hours trading for the West Texas Intermediate marker crude traded in New York?

Wall Street dithered, then rose and ended up by just over 100 points, the Fed mentions inflation and economic stability in the same breath, US bond rates rose: all in all it was all a bit frenetic.

Our market rose strongly, up more than one per cent in the first hour, but had come off the boil just before noon despite oil firming to $US95.30 a barrel and gold at $801.50, the highest level since early 1979. The Aussie dollar was around 93.20 USc, close to a 23 year high. It hit 93.38 in New York.

The reaction here and in Asia wasn’t as exuberant as after the September rate cut by the Fed because it left the market wondering. The key part of the announcement was this:

But recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation.

And this:

The Committee judges that, after this action, the upside risks to inflation roughly balance the downside risks to growth.

That made for some confusion so there was nothing of the rush upwards after the 0.50% cut after the 18 September meeting which altered sentiment in a twinkling and probably saved the balance sheets of leading banks and investors from a terrible mauling.

The fall in the US dollar and the renewed surge in the oil price, up $US6 a barrel in the last day, added to the questioning tone caused by the Fed’s commentary. It could be a hint that the rate cuts will stop if the Fed feels inflation is being bolstered by the rising price of oil and other commodities, or it could be “jawboning” in that the Fed might be trying to talk the US dollar into stopping its slide.

The cut came hours after third quarter gross domestic product figures were released showing the US economy grew at an annual rate of 3.9% in the three months to September, the strongest rate since the first quarter of 2006. But that was driven by a sharp rise in exports, up 16% in the quarter and which contributed 0.9% that growth figure as the trade deficit narrowed, and a rise in business inventories of 0.4%. Consumer spending rose 3% in the quarter as well.

That news and the Fed’s cut and mention of inflation pushed up interest rates with the 10 year bond hitting 4.45%. Economists were way short of the mark in their estimates of a 3.1% annual growth rate, and they say growth will close sharply to 1.8% this quarter. But the third quarter GDP figures also contained no sign of a break out of inflation, so the Fed’s commentary looked a little off centre.