"People had expected more details of the conditions for enactment and the form of QE3," said Doug Roberts, chief market strategist at Channel Capital Research. "Chairman Bernanke simply continued to say as he had before that the Fed had the tools to deal with geopolitical shocks and continued economic deterioration without any further detail."
The Fed's Open Market Committee said it would extend Operation Twist , a balance sheet-neutral operation in which the central bank sells short-dated notes and buys longer-term debt. Twist will extend for another $267 billion.
"As unpopular as today's benign-action move by the Fed may be, it is the right thing to do," said Todd Schoenberger, managing principal at the BlackBay Group in New York. "Unfortunately, many on Wall Street had been expecting a shock-and-awe accommodation program, which can only result in sharp disappointment. The markets will not respond well to this news."
With the economy wobbling, particularly in terms of job creation, and the stock market enduring a volatile spring, traders had been looking to the central bank for a dose of stability.
"There's really no impetus for the Fed to ease right here," added Kathy Boyle, president of Chapin Hill Advisors in New York. "Things are slow, things are kind of ugly, but the market hasn't dropped dramatically."Page 2 of 5 | Prev Page | Next Page