And the Fed's response to the slowdown?

The Fed today took the minimum possible step toward a more expansive policy, changing the wording of its statement to stress that it will maintain interest rates near zero "at least through mid-2013" rather than "for an extended period". It also says it will monitor the size of its asset holdings and consider the full range of policy options in case the economy weakens further.



I think this statement should have been made about three months ago, and today's action should have been to actually announce another round of asset purchases. But like last year, it looks like the Fed is going to be about six months late (and perhaps several trillion dollars short) with its policy response.



Note: I don't like to read too much into stock price movements, but it looks like the market was rallying this morning on rumors that the Fed was going to take some action. The Dow has fallen about 200 points since the Fed released its statement at about 2:18 and is now back to where it was at the beginning of the day. Nice job guys!



Update: Dow is up 429 for the day and Treasury yields are down. Looks like the stock market liked the Fed's statement after all. But I still think it's too weak.