The Fed meets today and is scheduled to release their official statement at 2:15 p.m. ET. They are expected to make no changes to current policy, leaving the overnight rate unchanged and continuing the QE2 Treasury purchase program. Not that the Committee was wavering, but the events in Japan will likely give them more cover in leaving monetary policy accommodative.
The markets are now intensely focused on the possibilities of a nuclear disaster in Japan as $364 billion worth of wealth was lost from the Japanese stock market overnight. The U.S. stock markets opened broadly lower and treasuries were the recipients of a flight to quality bid.
Three hours into the U.S. trading day stock markets are finding support and some of the bid is exiting the bond market. Early this morning the yield on the 10 year note had fallen to 3.23% and is now trading at 3.29%. It is hard to know how events will play out in Japan and the Middle East so take advantage of the opportunity the market has given you today.
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