As expected FOMC meeting keeps QE2 in place until the end of June. Japan will have to cash US treasury bonds to pay for the disaster. US Fed/gov't will be buying. More money will be printed to offset Japan and China cashing out US bonds. We will have QE in perpetuity. Japan will need a lot of oil to replace nuclear power plants and commodities to rebuild. It looks like G&S will move up big time over the next month or two. Keep your mining shares.

FED on Track for more QE2

http://traderdannorcini.blogspot.com/

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.