Fed Says Little New

The FOMC did what was largely anticipated. Recognizing that consumption has picked up, it slightly upgraded its assessment of the economy.

However,this has been blunted by labor market assessment. In December it has said that the deterioration in the labor market was abating but now says the improvement is not sufficient. This slightly more emphasis on the labor market is the new element. The continuation of Treasury purchases, coupled with the modification of the labor market assessment triggered a quick push lower on the dollar, but it quickly bounced backed. The rise in commodity prices while acknowledged did not alter the longer-term inflation expectations. There were no dissents. Future meetings, especially as the $600 bln purchases near completion may be more contentious.