With all the recent focus on Europe, and with no major surprises hanging in the balance for domestic monetary policy, it's easy to forget about the Fed.  After completing new asset purchases in late 2014, the Fed was effectively out of interesting arrows to fire. 

There was widespread interest in whether or not the Fed would remove the "considerable time" in its December statement.  They ended up dropping it and keeping it at the same time, in a very weirdly-worded sort of way (here's the detailed recap from that day).  The point is that "considerable time" is still there, but in reference to the last time they said it, effectively letting the audience think whatever they wanted to think anyway.

This time, however, the Fed will essentially be forced to drop that verbiage as it was used last time, because the last usage was only to mention it as being "consistent with its previous statement."  To do so again would be like hearkening back to a hearkening back, and that's just too much hearkening.

Even then, markets likely won't be forced to care.  It will be more interesting to get out the super sensitive metal detectors and search for tiny nuggets that might allude to a change in rate hike timing.  Yes, of course that's what the "considerable time" verbiage was supposed to be about in the first place, but it was always vague and flavorless.  Plus, the last statement set the ball rolling in a rate-hike-ish direction, and there's a chance that this announcement does something to pause or reverse that new momentum. 

How would markets react if that turns out to be the case?  Oh, they might not react at all!  Something in Europe, or some momentum in equities, or a simple shuffling of tradeflows amid increased volume could all have far more of an impact on trading levels.  As has been the case, MBS should continue to be insulated from the more volatile moves in Treasuries and beyond, for better or worse.