Bonds sold off, because there may have been some expectations the Fed would do additional purchases of Treasurys, which did not happen.
They are purchasing additional agency mortgage-backed securities...$40 billion a month. This, in addition to the roughly $45 billion being purchased from its Operation Twist program, where it is buying at the long end and selling on the short end.
The key statement: "the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability."
That is essentially open-ended, to be terminated when the outlook for the labor market improves.
The Fed also said low rates would be warranted "at least through mid-2015."
The big question: will this finally move people out of their bond funds, especially Treasury funds, and into stocks? Never mind that the S&P 500 is up 40 percent since August 2009; investors wanted low volatility and safety. By that standard, those investors have been very well treated in the past three years in those bond funds.
But now, the long-term bond ETF (TLT) is at a 4-month low.
That might be enough to get a few investors’ attention, but it’s not enough. Not yet. There will have have to be more damage than that to get investors out of those bond funds, but it's moving in that direction.
—By CNBC’s Bob Pisani
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