Fed Press Release 12/16/09

Funny how market participants always eagerly await the Fed's assessment of interest rate when history has consistently shown us that they, like everyone else, must react to the demands of the markets.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

How long will the market let them maintain this position? The action in the bond market as defined by TBT (Double Inverse Long Bond), continues to suggest a trend in transition. The longer TBT trades above 47.5-48, the greater the probability of another upside move. A move that would push 30-year yields to 4.5-4.6%.

TBT:

30-YR:

Source: http://www.federalreserve.gov/newsevents/press/monetary/20091216a.htm