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Here is a side by side comparison of today’s FOMC statement:
The Federal Reserve was so careful and meticulous to telegraph its intentions in advance that it didn’t even cause a ripple in the market at 2:15 PM - unless you count a 4 point move a ripple. As expected, the Fed will continue to provide the trough of free money, for now. You can bet they will be acting with extreme caution when it comes to removing the liquidity so as to not snuff out what could be an actual recovery in the making.
The delicate balance they are trying to strike is just enough liquidity to fight deflation, but not so much that it creates an inflation monster they will have to wrestle with down the line. Yes, once again, we return to the inflation/deflation question.
Hat tip to Tyler for the comparison.
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