Central European currencies were hit by rather hawkish outcome of Fed meeting. FOMC was more optimistic on growth and employment and Ben Bernanke suggested that tapering asset purchases is about to start later this year and maybe finished by mid 2014. The reaction of regional currencies was quite typical. While the Czech koruna remained more or less untouched (-0.3%), the Polish zloty came under pressure (-0.6%) and the Hungarian forint went through pretty intensive sell off (-1.5%) and touched psychological level at 300 EUR/HUF. It seems clear that the zloty and forint are going to strengthen their already strong correlation with global risk assets after the Fed. The rolling 30-day correlation coefficient of daily changes between EUR/HUF and S&P 500 is above 0.7 (six month highs). Fed promised tampering of the asset purchases to be data dependent. Hence ultimately it should not have negative effect on the Central European markets, if the performance of their economies does not lag significantly behind the US one. As Polish industrial output showed that can unfortunately be the case. Industrial production fell in May 0.7% m/m and 1.8% y/y. Construction is still coping with the post-championship recession and fell by more than 27% y/y in May. If NBP puts these pieces of information together with much lower than expected inflation, it should decide (in contrast with Fed) to keep its easing bias.