REUTERS/Frank PolichIt's the day everyone's been waiting for: Fed day.
First, the scoreboard:
- Dow: 15,112.1 -206.0 -1.3%
- S&P 500: 1,628.9 -22.8 -1.3%
- NASDAQ: 3,443.2 -38.9 -1.1%
And now, the top stories:
- The Federal Reserve wrapped up its two-day Federal Open Market Committee (FOMC) meeting and published its market-moving statement and updated economic forecasts at 2:00 p.m. ET.
- The big takeaways were that the Committee saw "further improvement" in the labor market and said downside risks to the economy have diminished since autumn. They also significantly lowered their inflation expectations.
- It's worth noting that the Fed revised its 2014 unemployment rate forecast to a range of 6.5% to 6.8%, down from a previous range of 6.7% to 7.0%. In case you forgot, the Fed said at its December meeting that it would use unemployment rate and inflation rate thresholds to guide monetary policy. And its unemployment rate threshold is 6.5%. This suggests that the Fed may be warming up to the idea of tightening monetary policy sooner than later.
- Bernanke also addressed the taper, or gradual reduction, of its quantitative easing, or bond-buying, plan. Specifically, he said that if the Fed's economic forecasts hold, then it would be "appropriate to moderate the pace of purchases later this year," ending mid-2014. Sixteen Economists Predict When The 'Taper' Will Begin »
- Increasing optimism toward the economy and the prospect of a taper in the near-term appeared to be the catalyst for an interest rate rally. It also appeared to spook the stock market, which immediately crumbled.
- Don't Miss: GOLDMAN: Here Are The 6 Most Interesting Charts In The World Right Now »
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