The Federal Reserve Board announcement today was that there will be no change at all in its policy from it’s previous policy statement. The Federal Reserve said it will keep interest rates at the unprecedented rate of zero to 0.25% for the foreseeable future, saying it would “keep interest rates low for  an extended period.” The Fed also said that it will continue its previously announced Treasury buys to try to bring more confidence to the marketplace and stimulate the economy. Treasury market investors were actually fairly disappointed today, as some had expected the Fed to announce an increase in the amount of purchases it would be making.

Stock traders were also fairly disappointed with the Federal Reserve announcement because of the lack of changes. The fact that there was no change in the federal funds rate was expected, but the lack of any kind of additional stimulus news or details on what the Federal Reserve may do to help the economy exit this deep recession did shock quite a few people. It seems that the statement was taken as just continuing with the status quo, and many traders and strategists on the street wonder whether that will be good enough to help the economy move higher.

In fairness to the Federal Reserve, it is in a very tight box right now. The Fed has taken heat from many about fiscally irresponsible, and is trying to stay within its boundaries as best as possible while still responding in a firm way to a major economic crisis.  Over time if changes need to take place I certainly hope the Fed will be quick to respond to an economy that changes on a daily basis. For now it seems that the Federal Reserve believes that things are getting better very slowly, and that the current course is the right course for this economy.

*If you would like to read the full text of today’s FOMC Monetary Policy Statement Click Here*