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FOMC Statement (March 2010): Side By Side Comparison at Trader’s Narrative





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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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One Response to “FOMC Statement (March 2010): Side By Side Comparison”  

  1. 1 PEJ

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    To answer the inflation/deflation question: it’s clearly deflation, from whatever angle you see it. It’s crystal clear for anyone who uses the “monetary base total credit” as definition of what is deflating or inflating. Plus, general prices are all falling. Even financial assets are still 20 or 30% below where they were at the top.

    Additionally, I would add that it’s time to stop the Grand Experiment and get back to a sound currency that is nobody’s liability.

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