Fed Stays the Course with One Exception.

The Federal Open Market Committee leftinterest rates unchanged as expected as well as a majority of its policystatement from previous sessions.

The Federal Open Market Committee leftinterest rates unchanged as expected as well as a majority of its policystatement from previous sessions.

The Dollar fell and stocks rose as the Fedkept its balance sheet intact while changing the composition of said balancesheet by moving out of mortgages and into long-term Treasuries.

The Fed also said that inflation is“subdued” without specifically mentioning any issues with deflation. It alsoadded that interest rates would remain low for “an extended” period.

The FOMC vote was not unanimous, as KansasCity Federal Bank President Thomas Hoenig once again remained the lone hawk.The vote was not “bookended” by any doves as some had anticipated.

The news weakened the Dollar by fuelingshort-covering rallies in most major Forex markets.