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In the boring world of Fed statements, this one was an eye-opener, indeed potentially historic.
It was different in tone AND content from other Fed statements. How different? Traders on the floor looked a bit confused as they tried to parse through a lot of headlines that sounded very different from previous statements.
From a traders perspective, the Fed hit all the right notes. Stock traders wanted the Fed to come out swinging on several issues:
1) How long will rates stay low? "Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."
2) What will the Fed do to help the economy and combat deflation besides cutting rates? "The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability...The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity."
3) Will the Fed continue to buy mortgage-backed securities? The Fed "stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant."
With this statement, the Fed is essentially saying, "Are you a simpleton? If you are not sure about what we are doing, here let us spell it out for you. We will do everything."
"Are you a doubter? If you are, stop doubting. We are on board."
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CNBC's Names in the News:
General Electric [GE
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Goldman Sachs [GS
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Questions? Comments?
- Bernanke Offers Something For Everyone
- The Good And Bad of Credit Cards
- Commodities Rally On Dollar's Weakness
- Next Week's Stars—The Retailers
- Today's Drivers: Retail and Tech
- Can Retailers Meet Those High Expectations?
- Yes, Now A Genocide-Free ETF
- What Matters Most on The Floor
- Wal-Mart And Kohl's Beat—But Cautious Outlook
- After The Bell Big Announcement: HP To Acquire 3Com
Data is a real-time snapshot *Data is delayed at least 15 minutes