The FOMC appears to have 'tweaked' its message to fit with Bernanke's confusing commentary and confirms that 'tapering is not tightening'.
- FED SAYS INFLATION 'PERSISTENTLY' BELOW 2% GOAL COULD POSE RISK
- FED SAYS ECONOMIC GROWTH WILL PICK UP FROM RECENT PACE
- FED REPEATS RATES 'EXCEPTIONALLY LOW' UNTIL JOBLESS AT 6.5%
- FED SAYS UNEMPLOYMENT WILL GRADUALLY DECLINE
- FED SAYS 'DOWNSIDE RISKS' DIMINISHED 'SINCE THE FALL'
- FED NOTES THAT MORTGAGE RATES HAVE RISEN SOMEWHAT
- FED SAYS IT IS PREPARED TO INCREASE OR REDUCE THE PACE OF PURCHASES
Bullard no longer dissenting, George is sole dissenter. Here is the key statement addition:
The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance...
i.e., the Fed now has an "out" if the economy tanks: it is due to inflation not hitting 2%, which the Fed can also blame the broken fiscal system on.
And don't forget, of course, that this is all pretense in the face of the inevitability of the taper due to refunding, political, and technical reasons. As we noted earlier, it seems preferable to pretend the economy is strong enough to withstand less-easing (tightening) than admit the Fed is cornered.
Recall, the only chart that matters to the Fed structurally: a 30% drop in funding, and thus monetization, needs for the US in Q4 2013 compared to when QEternity was launched:
Pre: S&P Futs 1685, 10Y 2.65%, USD Index 81.80, WTI $104.65, Gold $1311