FED SAYS INFLATION IS RISING, QE2 TO END AS SCHEDULED IN JUNE

The announcement is out!

No change in interest rates.

QE2 will continue as scheduled, with plans to end it in June.

The announcement acknowledges a pickup in inflation.

Longer-term inflation expectations remain stable, however

Markets aren’t doing much on the news.

Here’s the key paragraph:

In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of $600 billion of longer-term Treasury securities by the end of the current quarter.  The Committee will regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.

This was an unanimous vote.

Background: Well, by now this has been pretty well hyped. The statement will be available at this URL.

Everyone will be looking to see if there’s any hints about QE2 ending, while looking for terms like “extended period.”

Markets are going nowhere, really, ahead of the news.

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