Fed Has Eye on Housing

Updated from 3:52 p.m. EST

As the Fed delivered its 12th rate hike in a row on Tuesday, quadrupling the fed funds rate in the process, the question has become, "What does it have to show for it?"

"There's very little evidence so far of the impact it's had on the economy," says Doug Porter, deputy chief economist at BMO Nesbitt Burns.

The Fed's rate hike had little impact on stocks Tuesday. But on the heels of several up days, the widely expected quarter-point hike -- and a promise to deliver more -- provoked a typical sell-the-news reaction.

After briefly spiking higher after the Fed's 2:15 p.m. EST decision, major stock proxies returned underwater and stayed there into the close. The Dow Jones Industrial Average finished down 33.30 points, or 0.32%, at 10,406.77.

The blue chip average was weighed down by a 3.5% drop in Intel (INTC Quote), which gave back all of its gains of the past two sessions. GM (GM Quote) also came under pressure after posting a sharp drop in October vehicle sales.

The S&P 500 finished down 4.25 points, or 0.35%, at 1202.76. The Nasdaq Composite lost 6.25 points, or 0.29%, to 2114.05, weighted down by a profit-warning from computer-maker Dell (DELL Quote), whose shares tumbled 8%.

The Fed's Dirty Dozen

In the statement accompanying Tuesday's quarter-point hike, the Fed stuck to its script by again described monetary policy as being "accommodative" to economic growth. Risks to growth and inflation remain balanced under the current "measured" policy, laying the groundwork for more hikes to come, the statement stated.

The Fed also repeated its September forecast that hurricane-related disruptions to economic activity will prove temporary.

This has to frustrate those, such as Bill Gross, manager of bond powerhouse Pimco, who had been expecting that the Fed would start signaling the end of the current rate-tightening cycle. Tuesday's stay-the-course turn by the Fed suggests central bankers are looking at something other than headline growth and core inflation. But what?