Fed decision – what we got

September 23, 2009  – Financial times

Pretty much as expected I think, including the three month extension of the agency MBS/debt programme, with a few interesting vignettes.

1. FOMC sees a housing sector pick up but is still not sure about household spending.

2. It sees the pace of business retrenchment slowing.

3. It was a fraction more upbeat about growth prospects than I had expected – or maybe they are just making it clear they do not see a double-dip ahead.

4. No reference to higher commodity prices this time.

5. The slightest hint of a phased exit strategy underway – the FOMC will employ “a wide range of tools” not “all available tools” from here on.

But the key points: no change to the extended period language; completion of the asset purchase programme; no prospect of early rate hikes.

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