The Fed's new interest rate projections ended up having only a modest impact on market expectations last week. Indeed, the impact was smaller than we might have expected based on the pledge in the accompanying statement alone. In the end the Fed didn't take the opportunity to introduce a third round of quantitative easing last week, but the FOMC statement and the Fed Chairman's comments certainly didn't rule out the possibility in the near future. If Bernanke is seriously contemplating introducing QE3 soon then we would expect him to start building the case for action at his testimony to the House Budget Committee this week.