So far, getting the expected bounce from a neutral to potentially bond friendly FOMC statement. As we discussed, most pre-statement concessionary selling is already back in the picture as MBS move up 10 ticks in the first 60 seconds. Much more to be appended here shortly, but wanted to get you out the meaty bits while they're still hot.
(updated content 2:25pm)
Highlights†
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FED: TO GRADUALLY SLOW PACE OF PURCHASES OF
AGENCY AND MBS DEBT, EXPECTS WILL BE EXECUTED BY END Q1
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FED KEEPS BENCHMARK RATE IN ZERO TO 0.25 PCT
RANGE; RATES TO STAY VERY LOW FOR EXTENDED PERIOD
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FED SAYS ECONOMIC ACTIVITY HAS PICKED UP
FOLLOWING SEVERE DOWNTURN
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FED SAYS WILL PURCHASE A TOTAL OF $1.25 TRLN OF
AGENCY MBS, UP TO $200 BLN OF AGENCY DEBT
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FED SAYS INFLATION TO REMAIN SUBDUED FOR SOME
TIME AS RESOURCE SLACK DAMPENS COST PRESSURES
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FED SAYS LONGER TERM INFLATION EXPECTATIONS
STABLE
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FED-HOUSEHOLD SPENDING STABILIZING, REMAINS
CONSTRAINED BY JOB LOSSES, HOUSING, TIGHT CREDIT
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FED-MONITORING SIZE, COMPOSITION OF BALANCE
SHEET, TO ADJUST CREDIT, LIQUIDITY PROGRAMS AS WARRANTED
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FED SAYS TO COMPLETE PURCHASES OF $300 BLN OF TREASURIES
BY END OF OCTOBER
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FED-TO CONTINUE TO EVALUATE TIMING, AMOUNTS OF
SECURITIES PURCHASES IN LIGHT OF EVOLVING CONDITIONS
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FED VOTE ON POLICY WAS UNANIMOUS
-
FED-ECONOMY LIKELY TO REMAIN WEAK FOR A
TIME BUT POLICY ACTIONS WILL CONTRIBUTE TO GRADUAL RECOVERY
Rather than write additional content at this point, or have you read it, you can just refer to the previous post, and know that the "bond friendly" FOMC statement is what we got, and so the expected result is evident in the charts:
Take a breather!
Or read the full text, your choice:
source: www.federalreserve.gov
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†highlights ©reuters