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Forget Taxing Marijuana; The Real Money's In Cocaine

The Fed just came out with one of those statements that everybody talks about and nobody finds surprising. Two key points from today's statement:

1. As expected, the Fed will stop purchasing mortgage-backed securities by the end of this month. It bought more than $1 trillion of these bonds as part of its massive intervention during the crisis.

2. There had been some question about whether the Fed would use the same language it's been using about keeping its key interest rate super low for a lot longer. That language did stay the same, including the key four words: "for an extended period." That drove up the price of stocks and commodities, which tend to do well when money is cheap, the WSJ notes.

The statement is from the Fed's Open Market Committee. Nine committee members (including Ben Bernanke) voted for the statement; a single member dissented, because he thinks keeping that "extended period" language in there could create another financial bubble and cause more trouble. Or, in Fedspeak, he believed that:

...continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.