Jan Hatzius, Goldman’s US economist, says he sees no policy implications from the Fed reducing its announced intention to buy “up to” $200 mln in agency debt to “about” $175 bln. He says it is merely the Fed’s view that the supply of Agency debt is getting a bit tight.
Some viewed the minor reduction as a modest tightening of the QE spigots.
Markets are consolidating with EUR/USD pulling back from the 1.4908 high, now at 1.4882 and AUD/USD is now at 0.9130.