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2:30PM : Market plummets to its worst levels of the session, in sympathy with a sell off in Treasurys, but finds some buying support just above the flat line... While the policy statement was basically left unchanged, the mention that "pressures on inflation have picked up in recent months" has rattled the bond market, as the 10-year note, which was up 11 ticks yielding 4.47% ahead of the report, has now fallen more than 14 ticks and now yields 4.57%...

The actual text of the statement reads: "The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Output evidently continues to grow at a solid pace despite the rise in energy prices, and labor market conditions continue to improve gradually. Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices. The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability."NYSE Adv/Dec 2010/1234, Nasdaq Adv/Dec 1786/1208

http://biz.yahoo.com/mu/update.html