Today's FOMC Meeting Ends with Major Change

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After today's Federal Open Market Committee (FOMC) meeting, the Fed announced it would expand the third round of its bond buying with fresh stimulus, replacing the soon to expire Operation Twist, set to end Dec. 31.

And in an additional unprecedented move from the central bank, interest rate decisions will now be tied to the unemployment rate and inflation.

About a half hour into the release, the Dow Jones Industrial Average staged a near 65-point rally – but then lost that gain and ended down nearly 3 points at 13,245.45.

Here's a breakdown of the FOMC meeting outcome.

Today's FOMC Meeting: QE4

As expected, the FOMC meeting ended with a replacement for Operation Twist, the expiring program introduced in 2011 of swapping short-term Treasuries for longer dated ones. The goal of Operation Twist was to lower long-term interest rates to stimulate the U.S. economy.

The new asset purchase program is an extended arm of the Fed's familiar quantitative easing programs, and has thus been dubbed QE4.

Now with QE3 and QE4 together, the Fed will purchase a whopping $85 billion a month of Treasury securities, stacking the Fed's portfolio with government-backed investments for an extended period.

The buying spree will remain intact until the unemployment rate falls below 6.5% and inflation projections remain no more than half a percentage point above 2% for two years out.

The Fed also left interest rates at rock-bottom historic lows near zero, as was also expected.

While these moves were widely expected, what wasn't expected was the Fed's forward-looking guidance.

Today's FOMC Meeting: A Huge Policy Change

The central bank surprised analysts with a move from calendar-based guidance to one tethered to quantitative thresholds – namely, inflation and unemployment data.

The change actually answers the pressing question in the back of investors' and economists' minds of when the unwinding just might begin.

Previously, the Fed had maintained that interest rates would hover near zero until at least mid-2015.

The Fed statement read, "In particular, the Committee decided to keep the target range for the federal funds rate at 0 to one-quarter % and currently anticipated that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6 and a half percent, inflation between one and two years ahead is projected to be no more than a half percentage points above the Committee's 2% longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee views these thresholds as consistent with its earlier date-based guidance. In determining how long to maintain a highly accommodative stance of monetary policy."

Fed Chairman Ben Bernanke explained in a press conference following the conclusion of the two-day FOMC meeting that the central bank plans to keep its accommodative stance in place for at least the near future.

In an exasperated tone, Bernanke called the high number of people out of work a "waste of human and economic potential."

Gold Moves Higher after FOMC Meeting

Gold prices moved higher following the Fed's announcement, gaining $7 to $1,717 an ounce.

While the Fed stressed that inflation remains tame, and gold has been a long-time hedge against inflation, gold's rise and upward potential could reflect the growing fears taunting investors. The U.S. economy is just a mere 19 days away from falling off the dreaded fiscal cliff.

Up some 9% this year alone, and on track for its 12th consecutive yearly gain, gold is looking precious indeed.

This was the last FOMC meeting of 2012; the next one is Jan. 29-30.

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