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The U.S. Federal Reserve Board building in Washington, D.C.


Some reports have been highlighting the fact that the monetary policy statement from the Federal Reserve on Tuesday afternoon came with three dissentions. That is, three voting members on the Federal Open Market Committee voted against adjusting the language in the statement, which now essentially promises exceptionally low interest rates for another two years.

Why the fuss? According to Sherry Cooper, chief economist at Bank of Montreal, the Fed had already taken "the least action possible given the circumstances" – but couldn't even get unanimity on it.

"Today's meeting was undoubtedly one of the most difficult and divisive in a very long time," Ms. Cooper said in a note. "All the Fed did was to change the language of the press release to emphasize the downside risks for the economy and specifying that current conditions warrant exceptionally low levels for the federal funds rate at least through mid-2013, rather than simply for an extended period."

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"Even after the downward revisions to GDP, the weak Q2 growth rate, the rise in unemployment, the continued housing depression, the fiscal tightening and the recent sharp selloff in the stock market, three out of 10 voting members on the FOMC wanted no change in the 'extended period' language. They should give their heads a shake."

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