Photo: Sugar Pond, Flickr
Analyst commentary on the Fed decision is flooding in.Here’s Jefferies’ David Zervos…
In they end they delivered much more than market expectations on QE. I talked to sooooo many folks who still thought QE was unlikely – amazing. This open ended commitment is stronger than a 300b announcement, and it means “the put” is fully in place for the global reflation trade. The fact they didn’t did lower the IOER is a disappointment, but it would have been a very aggressive move. The fact is that 2s were a cheap option, and still are! To that end, I like the line – “the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.”
Open ended continued easing….period!
Everything is still on the table and there is a bias to do more and use “other tools”. This is a “I’m gonna ease till your eyes bleed kinda statement”. Should be a fun press conference. More later. Good luck trading.
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