The market has QE3 on the brain.
Stocks and commodities rallied as the Fed minutescame out.
Some traders clearly felt that the Fed was signaling a third round of quantitative easing (QE3) solely because they acknowledged discussing a range of easing options.
"A few members felt that recent economic developments justified a more substantial move" seemed to be all that was necessary to get everyone salivating again.
My usual policy is not to fight the tape, but really: this may be a case where traders really are hearing things (that you, Grandpa?). The Fed is deeply divided; they couldn't even seem to agree on whether inflation posed an imminent threat or not.
Respected analyst Richard Medley, whom I had on last week, said that if Bernanke tried to force a vote on QE3 right now he would likely have five dissenting members. That would be unheard of.
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