What will be the market's reaction to a failure of the Fed to bring up QE3 or sterilized QE? Can it start a stronger correction in equities? Expectations heading into this event do not seem to be pricing in either a sterilized QE announcement, nor a full stop to easing measures, thereby likely not giving the market a big catalyst. If the Fed upgrade its assessment of the economy by a stronger than expected amount it could have an negative impact as traders further price out more stimulus. Instead the Fed is more likely to wait till Operation Twist is close to conclusion before telegraphing any new stimulus measures ... (full story)