I'll have more about yesterday's developments at the Federal Reserve after the central bank releases its updated economic forecasts and Fed Chief Ben Bernanke conducts another one of his quarterly press conferences.
But, based on what they had to say in the policy statement, it would appear that the Fed is doing the minimum possible to support financial markets and the economy by extending "Operation Twist" and making some vague references about doing more.
Obviously, interest rates were left unchanged at the freakishly low level of between 0 and 0.25 percent and there were no changes to how long the Fed intends to keep them there.
The prospects for the economy were downgraded modestly and the likelihood of further action increased as the policy statement noted, "the Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions…"
This was an update from last month's promise to "regularly review the size and composition of its securities holdings … prepared to adjust those holdings as appropriate to promote a stronger economic recovery".
We'll see how this plays out. So far, not so good with financial markets that initially moved down. Much depends on how this willingness to act is characterized in the press conference later today.
As always, the last two policy statements are shown side-by-side below for comparison:
Click to enlarge