U.S. markets and stock exchange traded funds slipped from record highs Wednesday after the Federal Reserve dashed hopes for another round of accommodative monetary policy measures.

On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) was down 0.7%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was 0.3% lower and SPDR S&P 500 ETF (NYSEArca: SPY) fell 0.4%.

Some market observers were hoping for a yield curve control where the Fed would cap yields at a specific point on the curve by purchasing 2- or 3-year maturities, for example, to reinforce guidance that rates will be capped at a lower level, Reuters reports.

“It was a mechanism for providing a stimulus that the Fed has now ruled out at least for the time being,” Nathan Sheets, chief economist at PGIM Fixed Income, told the Wall Street Journal. “They said we’re really good with the hammer and screwdriver, but don’t need the drill.”

Traders first got the idea after minutes of the Fed’s July meeting when a majority of the monetary policy committee commented on yield caps and target as a monetary policy tool.

However, most of the policymakers believed that the yield caps and targets would only be mildly beneficial in the current environment.

“I think the fact that the Fed was not too warm on the yield-curve control and some of the extreme measures investors may have liked to see was a concern,” Mike O’Rourke, chief market strategist, Jones Trading, told Reuters.

Furthermore, the Fed cautioned that the U.S. economy’s recovery from the damaging effects of the coronavirus pandemic faced a highly uncertain path with a potential uneven road to recovery as new Covid-19 hotspots popped up. The central bank also pointed out that the rebound in employment seen in May and June may have likely slowed and that additional “substantial improvement” in the labor market would hinge on a “broad and sustained” reopening of businesses that are still struggling.

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