The big non-news of the day outside of the developments in Japan was the FOMC's press statement maintaining the status quo of low interest rates and a continuation of the QE2 purchases through the end of June.
Given the fact that there is a lag between the time of their meeting and the actual release of the FOMC minutes, it is safe to say that events in Japan now totally overwhelm whatever the FOMC was looking at prior to the horrific earthquake that has shattered the lives of so many of those suffering on the battered island.
While the Fed has seen the US bond market rally sharply as a result of both the events in MENA and those in Japan, the falling interest rates that have resulted are not especially what they were hoping for given the collapse in global equity markets.
With many tossing out 2008 as a comparison to what could happen to prices in general if the hedge funds continue their barrage of selling, the Fed will no doubt be closely watching the level of the US stock market. They are probably a bit pleased to see the mauling occuring in the commodity sector but not with the plunge in the equities. They will not let a repeat of 2008 occur on their watch and will do whatever is necessary to provide sufficient liquidity to prevent it.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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