The S&P 500, still 7 points off the all-time high. It closed up 0.7 per cent at 1,558.71 (Bloomberg).
The Fed left its easing unchanged but cut growth forecasts for 2013. The central bank will carry on buying $85bn of assets per month until economic thresholds are met, the FOMC said. The FOMC's statement was tweaked only slightly, to add that the Fed would "continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives" -- a nod to concerns of some members about further QE (Financial Times).
The FOMC forecast growth for 2013 at 2.3 to 2.8 per cent, versus 2.3 to 3.0 per cent in December's statement. But the Fed also now expects unemployment to fall to 7.4 per cent by the close of 2013, rather than 7.6 per cent (Fed projections). Chairman Ben Bernanke signalled in his press conference that "we may well adjust the pace of purchases" subject to "meaningful" labour market improvement (Reuters).
Cyprus sought more time for a Plan B for its bailout. Cypriot proposals to find money other than through a depositor tax fell on deaf ears in both Brussels and Moscow. To avoid a banking collapse in the interim, the island's central bank announced that a bank holiday would be extended into next week, while the government readied a decree on emergency capital controls for parliament to consider on Thursday (Wall Street Journal). Russian prime minister Dmitry Medvedev attacked the EU's handling of the crisis on Wednesday. "All possible mistakes that could be made have been made by them," he said (Financial Times).
JPMorgan is readying its first post-crisis offering to the non-agency mortgage bond market. The $616m of prime mortgage-backed bonds contain "significantly diluted" rules on buying back soured loans, according to raters at Fitch (Bloomberg).
Oracle blamed the strong dollar for disappointing profits. Shares in Oracle fell 6 per cent after hours on adjusted earnings of $0.65 per share, below expectations of $0.66. Total revenues fell by 1 per cent to $8.96bn, below analyst forecasts of $9.38bn (Financial Times).
SAC Capital is up 4 per cent so far this year, beating the average hedge fund return of 3.22 per cent. A probe into allegations of insider trading at the fund goes on, after SAC paid $616m to settle four charges last week (Reuters).
FURTHER FURTHER READING
- Fed takes by Ryan Avent and Tim Duy.
- And David Merkel's FOMC statement redaction.
- Andrew Ross Sorkin is still wrong about Cypriot deposits.
- "50 years from now historians may well be writing that Maastricht was a gamble, but a gamble that turned out well. Perhaps not."
- The "Norway Model" in investing.
