1. He made transparency history with the press conference, but potential clarity ignominy when he didn't provide direction for when, where and how the Fed will reduce their "emergency" monetary policy measures. Yes, QE2 will end in June, but when will they stop reinvesting all/part of those securities? When inflation rises? What gauges are they using versus what gauge is impacting American consumers? Are they going to allow demand destruction via energy and food inflation to drive down purchases of other goods? How do I eat an iPad2? These are just a few more questions that were generated during the conference versus questions answered.
2. He kept the status quo monetary structure that is driving down the value of the US dollar and driving up the value of stocks. US dollar index put in a new low for the year and was is back at the level of August 2008. US stocks put in new highs for the year and is back at the level of June of 2008.
3. He kept the policy in place that is buying 85% of all government debt sold since QE2 started in November. TIPS or yields on Treasury securities should not be used as indicators for how the market views policy until the Fed steps away and we can see how a "normal" market reacts. Pimco's Bill Gross sold all of his Treasury securities for precisely this reason. What happens when emerging market countries allow their currencies to strengthen to fight inflation, stop buying US dollars to keep their currency weak and stop buying US Treasury securities with those US dollars? It means the two largest buyers of US Treasury securities are no longer purchasing the paper.
Andrew B. BuschDirector, Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch.