FOMC Announcement Headlines

– The FOMC decision
is a three-act drama today: the policy statement drops around 12:30ET, economic
forecasts come at 14:00ET and Chairman Bernanke’s press conference is at
14:15ET. 

Analysts expect Operation Twist to be replaced with un-sterilized
Treasury purchases of roughly the same size. The Fed has signaled that it would
like to supplement or replace its calendar-based guidance at some point, but
that change is not expected today. 

Markets are also waiting for a definition of
what constitutes a “substantial” improvement in labor market
conditions to warrant phasing out the Fed’s net asset purchases.