Instant View: Fed Holds Fire, Lone Dissenter Wanted More Easing

The U.S. Federal Reserve left monetary policy on hold on Wednesday and offered a moderately brighter economic outlook, but flagged risks to growth that appeared to leave open the door for further easing.

COMMENTS:

KARL MILLS, PRESIDENT, JURIKA, MILLS & KEIFER INVESTMENT PARTNERS, OAKLAND, CALIFORNIA

"As expected. We've seen some marginal improvements in the economy. There was some talk about QE3 and whether they would lay the groundwork for that. There didn't seem to be any reason for that other than to say we are there with the fire hose of last resort and we will do whatever we need to do to support the economy ultimately, but we are not going to open the candy jar right now."

"Our view on the Fed statement is as expected, a non-event at the moment. It's good news in the sense they are acknowledging there is some marginal improvement in the economy here right now. There are still causes for concerns, particularly among employment and housing, if you believe those are bottoming and improving that's better."

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"All eyes are quickly going to jump across the Atlantic to the south of France and the G20 comments on what is happening in Europe."

CARY LEAHEY, MANAGING DIRECTOR AND SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK

"The Fed has a right hand and a left hand and this time the left hand decided to dissent because the Fed was not doing enough. That was not a surprise. Having a dissent from a dove does not surprise me."

JIM AWAD, MANAGING DIRECTOR AT ZEPHYR MANAGEMENT, NEW YORK

"I'm going to wait for the news conference. What they said was not surprising and I think the markets will be on hold to see what he (Chairman Ben Bernanke) says."

MARK LUSCHINI, CHIEF INVESTMENT STRATEGIST, JANNEY MONTGOMERY SCOTT, PHILADELPHIA

"The three previous dissenters fell back in line. What is interesting is that you have a dissenter for more easing. The market thinks Evans, who seems to be publicly lobbying for more MBS purchases, might be a canary in the coal mine for further easing.

"My take-away is that there is a recognition that things have improved as they had expected. It's a relief more than anything else. We are clearly not out of the woods. They might be inclined toward a QE3 but they are waiting for more evidence that more action is needed. It may be a recognition that they might be running out of bullets.

"The market is largely treating this as a non-event. This statement is not reflecting a significant departure from prior views expressed by Fed officials."