Markets Miss The Point As The FOMC Doubles Down On QE3

``... much of the press conference focused on the FOMC's shift from an estimated target date, like 2015, to an economic condition, 6.5 percent unemployment, as a "guidepost" for when to consider beginning to tighten. While this was a significant change, probably for the good, I think the markets should have focused more on the other part of the FOMC's announcement, that it would continue the bond purchase part of operation twist and discard the sales part. Specifically, they announced that they would buy about $45 billion of longer-term Treasury bonds per month in addition to the $40 billion per month of agency mortgage backed securities announced in September. By dropping the sales component of operation twist, it means that the entire $85 billion of asset purchases will add to the Fed's balance sheet as none of it will be sterilized.''