A smug sense of satisfaction, I would suggest. They’ve done a good job in calming markets and closing credit spreads even if some of their high profile interventions like buying Treasuries and the TALF have been less than stunning successes. The overall approach has helped settle financial markets to the point were equities are challenging key resistance levels at 875 on a day when six banks of the nineteen systemically important names in the US are said to be in need of more capital.
This should give the Fed room to stand pat and perhaps revise their economic outlook up a notch given the recent stabilization in the data.
As long as the Fed “does no harm” in its statement, we can assume the intraday trends on Wall street and on the foreign exchange market, will continue. any move toward greater quantitative ease will likely leave the markets uneasy and will no doubt undermine the dollar.
