Almost lost amid the Greek drama is today’s announcement from the FOMC. The announcement comes early, at 16:30 GMT with a press conference to follow later at 18:15 GMT.
Here’s what to expect:
- Lots of concern that the economy is not growing quickly enough to reduce the high unemployment rate
- Lots of concern that the housing sector remains a strong drag on the macro economy
- A vow for the Fed to stand ready to do more to ease policy should the recovery falter
- But no immediate move to buy more assets (QE3)
- But if and when they do buy more assets, they will lean toward mortgage-backed securities rather than Treasuries
Bottom line, expect a “verbal QE3″. They will do everything to set the market up for further asset purchases short of announcing the launch of a new program.
