What world has the Fed been living in for the past month?
First of all, there is no change in the second half of the Fed statement — no a single word. The rhetoric on taper/no taper is exactly the same as it was in September when it was a ‘close call’ not to taper.
That’s not even the biggest surprise. The economic assessment is also virtually equal except for a downgrade to housing. This is all you need to read:
Later, the Fed also removed the lines about tightening financial conditions, which is an ode to itself for continuing to print at full speed in September.
Indicators have been worsening since the past Fed meeting but there isn’t any hint at that whatsoever, nor is there a fresh comment on the shutdown. It looks to me like the Fed is deliberately keeping a December taper on the table. They’re not saying it will happen, not by a longshot, but if the data improves, it’s a real possibility (and certainly higher than the 5% probability most traders are giving it).
The dollar likes it, and for good reasons.
Bernanke as he prepares to pimp-slap USD bears
