As far as Fed days go, this one was pretty tame.  That's especially true if we consider the amount of hype and anxiety associated with this particular Fed day.  The total gap between highs and lows in Fannie 3.5 MBS was just over a quarter of a point.  That's the kind of intraday movement that occasionally happens for no good reason at all.

Taking the perspective a step further, the highs of the day were 6/32nds higher than yesterday's close.  That means that MBS lost less than an eighth of a point today!

Even so, losing ground may seem like somewhat of an insult considering the market hype would lead us to believe that everything would be just fine if the Fed maintained their "considerable time" verbiage.  Reality shows us just how much of an oversimplification that was.  This phrase was singled out as a representative of the market's broader concern, which is that the Fed would take further measured steps toward reducing accommodation. 

They accomplished this by officially laying out their exit strategy and also through the evolution of their forecasts.  In other words, the Fed is obviously remaining on the path of policy normalization.  On a final note, although it wasn't entirely unexpected, they also firmly announced that next month's meeting would mark the end of asset purchases.  I suppose there's something to be said for making it official.

All that having been said, let's keep in mind that we've constantly pushed back on the Fed being the only game in town right now!  Of course, the herd mentality surrounding today's announcement had to be respected, and we always want to be extra cautious when we're at the weakest levels in 2 months, but there are other market movers that have been in play.  These include European bond market spillover, corporate bond issuance, and geopolitical risk among other things.  The way these play out over the next two days could easily outweigh today's anticlimactic Fed news.