Posted by The reaction was mercifully modest given that i got it wrong – a fact i put down to markets being forward looking. Thus, the Fed’s signal that easing is very close has an effect very similar to an actual easing.
Jon’s indication that the statement means easing is close doubtless also helped:
Fed officials flagged intensifying concerns over the economic outlook and gave a stronger indication they are moving closer to taking further action as they continue to monitor the fragile recovery. A string of disappointing jobs reports, a sharp slowdown in second-quarter growth and a softening in inflation have fanned expectations that the Fed may step in later this year with new stimulus for the economy.
ricardian ambivalence 
Yes, as the market monetarists say, monetary policy works with long and variable leads.
Looks like the FOMC is waiting for another disappointing jobs report. ADP came out stronger than expected, so Friday night will be interesting.
does the D in ADP stand for ‘Dartboard’ ? :)
Yes!