It's pretty much expected due to the extraordinary situation. Their biggest concern is making sure there's ample liquidity, especially as the equity markets open. The bond market had been expecting it.
We're probably raising the endpoint for the Fed's easing target from 1.5 percent to at best 1.75 percent.
We are still kind of stuck in this 4.67-4.77 percent range and I guess the reversal in oil is what kind of took a chunk out of equities and resumed a modest bid in bonds.
It was an extremely ugly auction. And that's something nobody wants to see, not the Street and certainly not Treasury, given the amount of borrowing they have to do.
The real surprise is that none of the usual indirect bidders turned up. Maybe they were scared away by the jump in direct bidding (Wednesday).
It's a good sign, but it's not the driving force in the market.
The view that the Fed can take a measured approach is supported by the Greenspan testimony today -- he reiterated that the measured approach is really the right medicine here.
The market seemed to have it in their mind that the Fed had already changed their mind, that there was a change in policy to a more aggressive pace (of rate tightening), but that did not occur.
The market has every reason to be nervous.
The market tried so hard to break 3.90 (percent), but the Europeans threw in a curve ball.