The much anticipated FOMC monetary policy statement was just released. The FOMC has decided to keep the Fed Funds rate unchanged at 5.25%. The all-important language on monetart policy from the FOMC was largely unchanged, with the FOMC acknowledging problems in the credit markets, but saying that the 
predominant policy risk remains inflation. The FOMC appears to believe that the credit market problems should play itself out, rather than the FOMC coming to the rescue with any quick rate cut.
The statement said that economic growth in the past few months continued to be moderate, and the FOMC believes that the U.S. economy is likely to continue to expand at a moderate pace in the near future. They also said that the housing market correction is ongoing with no change from past conditions.
They key takeway from this statement is that the FOMC kept its policy bias toward tightening, which is likely to upset quite a few strategists and traders. There is no telling exactly what the market will do today, but the FOMC didn't change the bias toward neutral or easing of rates so there was no real help from them today. The likelihood of further weakness in stocks went up today because of the lack of change in the policy statement. It will be interesting to see what the FOMC decides to do in future meetings, and how much this meeting will affect the market.
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