Fed Rate Announcement Due 11:15am.

The Fed will release it’s monetary policy statement from its 2-day meeting today 11:15am pacific. Consensus estimates don’t call for a big change in rate stance, but improving economic news might call for a slight change in language on their exit strategy from near-zero overnight Fed Funds rates and timing on a reversal of their MBS program—going from buying mortgage bonds to selling. Below is the debate on exit strategy from their October meeting, which shows how market driven their decisions really are. Another update coming after today’s announcement is released.

With respect to the large-scale asset purchase programs, some members thought that an increase in the maximum amount of the Committee’s purchases of agency MBS could help to reduce economic slack more quickly than in the baseline outlook. Another member believed that the recent improvement in the economic outlook could warrant a reduction in the Committee’s maximum purchases. However, all members were able to support an indication by the Committee of its intention at this time to purchase the full $1.25 trillion of agency MBS that it had previously established as the maximum for this program. The Committee agreed that it would continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. Members discussed the importance of maintaining flexibility to expand the asset purchase programs should the economic outlook deteriorate or to scale back the programs should economic and financial conditions improve more than anticipated.