Fed avoids moving markets

The dollar headed south after the fed's decision to continue it's mortgage backed securities purchase program, mainly from the two GSE's, Fannie and Freddie. Only one fed offical reccomended winding the program down at this time. The central bank is keen not to raise interest rates too quickly, but will rather pursue repurchase agreements with primary dealers and other counterparties to mop up extra liquidity. Many parties are worried that this excess liquidity is having larger implications in the near and medium-term than central bankers realize, and that removing government capital from the market any time soon will be a difficult transition.