The Federal Open Market Committee just released its latest interest rate decision and statement
. Rates were left unchanged, as expected, at a range of 0% to 0.25%. The Fed also held onto its language pledging to keep rates low for an "extended period." One minor surprise: The Fed said it would reduce the size of its program to buy agency debt to $175 billion from the previously announced $200 billion. The Fed said the move "reflects the limited availability of agency debt." It kept its MBS
buying program target at $1.25 trillion. The vote for the policy actions was unanimous.UPDATE:
Treasury yield curve steepening on this news. 2-year yields down 1 basis point, 30-year bond yields up 6 basis points. Implication is that no Fed move raises longer-term inflation risk.UPDATE2:
Lack of dollar defense sending Dollar Index to day's low, off 65 bps to 75.65. NOT a new low yet, but if this sell off gains momentum, look out. Gold is flying, incidentally, up $12 to just shy of $1,100 an ounce.