Market Update

The upshot of the Fed's statement looks to be on very similar lines to Bernanke's Feb. 28 testimony - it's watching the housing market carefully, it notes there are issues to be aware of, but with those issues not yet impacting the wider economy, it also needs to be mindful of the upside inflation risks that continue to linger.

The big changes between the FOMC's Jan 31st statement and today's message were: the alteration in the last line of the statement on the potential for a further tightening of policy. January's comment 'the extent and timing of of any additional firming' has been altered in March to 'Future policy adjustments..'. In other words the FOMC has very carefully altered to a more neutral outlook.

We could see another secular bear market in USD on this.

EURUSD to test 1.3666. AUDUSD to test 0.8214.

Stock traders apparently ignoring the negative stimulus from housing and purely focusing on the eased rate outlook. That might be a mistake.