Journal article: The tightening cycle is going on, but bonds markets have unexpectedly gone in the opposite direction and imbalances have further aggravated. This is a cause of concern for Central Banks, which have to slow down growth without derailing it, while oil prices are climbing to new heights. The Federal Reserve will gently but forcefully increase the federal funds rate till 4 %. The ECB will not change its policy to spur euro zone lagging growth. The Bank of England will prefer the wait and see attitude to fine tune the softening of the housing bubble. No move is expected from the Bank of Japan without any end in sight of deflation. The euro will appreciate to $1,34 at the end of 2005 and thereafter depreciate to $1,25 thanks to a slight improvement of the US current account deficit.