Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktLink to the Federal Reserve FOMC statement
The Fed has noted the increase in consumer spending that has become apparent in the economic data. This is new. They anticipate moderate economic growth with subdued inflation and slowly declining unemployment levels. The Fed reaffirmed its commitment to maintain low rates through 2013.
Operation Twist will continue, and the Fed intends to continue to maintain its overall exposure to the mortgage market by re-investing cash received from maturing paper. There was no mention of QEIII.
Interestingly, we had a dovish dissent. Charles Evans supported additional monetary policy accomodation at this time. I am sure Barney Frank is preparing a statement condemning dissent at the Fed. /sarcasm.
Overall, markets aren’t reacting to the statement at all. FWIW, I take the official statement that the consumer is returning as bullish for the equity markets.
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All Things in Moderation 
"FWIW, I take the official statement that the consumer is returning as bullish for the equity markets."FWIW, I agree.
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"The Fed reaffirmed its commitment to maintain low rates through 2013."doe this mean the 1-year libor isn't really going to change between now and then? or it that something completely different.
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The Fed Funds rate is the interest rate the Fed charges banks.LIBOR is the interest rate the banks charge each other.
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NoVA:Libor is generally highly correlated to the FF rate, but it can move in a different direction because, being the rate at which banks lend to each other, it includes credit considerations that do not exist in the FF rate. So, for example, if there is widespread panic (as there was in '08) over whether banks will be able to repay an interbank loan, libor will spike up, even without an equivalent move in the FF rate. That has happened to a small degree over recent months, as 3m libor moved from about 25 basis points up to about 44 basis points, due largely to increasing fears about the effects of Greece on European banks.
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NoVA:Also, the FF rate is an overnight rate, whereas libor has various maturities, from o/n to 12 months. So as the yield curve steepens or flattens, the various libors will get further away or converge to the FF rate.
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