Markets have certainly reacted in a big way to the Federal Reserve’s monetary policy statement – particularly the part where the Fed said it would maintain exceptionally low interest rates until at least late 2014.
U.S. 10-year bonds jumped, sending the yield down 10 basis points (100 basis points is a percentage point) and putting it back below the 2 per cent threshold. That sudden yield dip marks its biggest downward move in more than two months.
The stock market seemed to like the news: The Dow Jones industrial average recovered about 60 points within minutes of the statement’s release, putting it close to break-even territory for the day. And gold shot $20 (U.S.) an ounce higher, taking bullion to $1,680 an ounce.
