The Fed Decision: No More Excitement for the Week!

With the downgrade of Greek debt and uncertainty in the Eurozone and the hearings on Goldman Sachs, the Fed apparently does no want to create any additional shocks to the financial system. The FOMC will most likely utilize speeches by Fed officials to telegraph any significant changes in monetary policy to minimize the chances of confusion and disruption in the market. This has been and will continue to be the pattern for the near future.

The FOMC did acknowledge an improvement in the economy. With unemployment expected to remain elevated for the foreseeable future and little inflationary pressure from the consumer price index (CPI) thus far, it is in no rush to tighten. This was indicated when the FOMC said it "anticipates a gradual return to higher levels of resource utilization in the context of price stability."

Thomas Hoenig dissented against the FOMC statement and wants to shift to a much tighter monetary policy. However, he still remains the only voice against the statement and is said to favor a change in language, not an immediate rise in interest rates.

There does not appear to be monetary tightening on the near-term horizon. The types of programs used to inject money into the economy are more a question of form rather than substance.

Doug Roberts is the Founder and Chief Investment Strategist for ChannelCapitalResearch.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices.