MMCLUB

[Naztrader]

Interesting Fed action today....................................

From Briefing.com:

"As expected, the FOMC left policy rates unchanged, with the federal funds rate targeted at the 45 year low of 1.00%. The statement that policy accommodation can be maintained for a considerable period was dropped, as the Fed said it "can be patient in removing accommodation" -- again suggesting an on-hold stance in the months/quarters ahead (the next policy meeting is scheduled for March 16)."

Removing the "considerable period" language means that the Fed won't be buying bonds to supress rates. This further means that money is getting tighter, therefore stocks should dip, as may metals and commodities.

They also must have foreseen this reaction to their announcement today. This morning the Fed announced a large $9 bln overnight repo, for a net $5.5 bln addition. This is out of character for the Fed, to conduct any open market operations at all on an announcement day.

We'll see if the Fed's dealers come out and flex their muscle in the last hour of trading.

Good luck.



Regards,



Naz