No much to get excited about here. The market expected a twist of roughly this amount. They did not launch QE3 and they did not cut the interest rate on excess reserves.
The dollar is rallying as the Fed did not go the whole-hog on adding additional liquidity to the financial system.
The long-end of the US yield is soaring as the Fed says it will sell securities maturing in three years and buying maturities from 6 years out to 30 years.
There were three dissenters once again, helping keep Bernanke and the other doves on the FOMC from ramping up the printing presses. That’s a structural plus for the dollar.
That said, the Fed remains extremely downbeat on the economic outlook and they are clearly trying to target unemployment, which is a tough thing to influence via monetary policy.
