Come On Baby!
The FOMC announced today that it will continue its Maturity Extension Program (MEP)—better known as the “twist”—through the end of the year and downgraded its views on the economy in its post-meeting statement. Fed officials now expect growth to pick up “very gradually” and think the unemployment rate will decline “only slowly.” Meanwhile, they continue to see “significant downside risks” due to strains in global financial markets.
Bottom Line: Interest rates will remain “exceptionally low … at least through late 2014” meaning that appetite for yield should continue to expand. Take me by my little hand, and go like this!