Fed statement–little change

A very quick and cursory look at the just-released Fed statement - 2:15 pm ET - revealed mostly a carbon copy of January's statement. And maybe just a slight upgrade in the outlook.

The Fed said:

• the economy is expanding moderately and it expects moderate economic growth over the coming quarters.
• the unemployment rate has declined notably but going forward, it anticipates just a gradual drop
• higher oil and gasoline will have just a temporary impact on inflation before it eventually slows (added)
  • With the economy still on an uneven footing, would the majority on the Fed really acknowledge a concern about inflation? Seems unlikely as that would force their hand and it would send LT rates soaring.
• no changes in any language regarding a third round of QE

None of this is really any surprise.

The Fed may just be setting the stage for something more significant at its two-day meeting in April (March's was just a day).

Final demand, which has befuddled policymakers given the relatively upbeat nonfarm payroll numbers, may hold the key for any new round of easing.

Sterilized bond buys appears to be the most likely part if we have a new move.

Retail sales
Good news on the retail front this a.m., and the upward revisions to January were welcome. But taken together with the weakness in Nov and Dec, it's steady as she goes. Still, I'll take upbeat numbers at the margin any day.

All this suggests the consumer is feeling better moving into the new year, as higher consumer confidence translates into more spending, despite the surge in gasoline prices.