Mohamed El-Erian, CEO of PIMCO, the world's biggest bond fund, just published his instant reaction to the Fed's policy announcement in the Financial Times.

On today's FOMC announcement that Operation Twist will be extended through year end, El-Erian says that "all the Fed will do is buy some time," and that in the interim, "collateral damage will mount, making the next policy steps even more excruciating."

Here are El-Erian's thoughts on the likely outcome of the FOMC decision today, and specifically how it affects his business at PIMCO:

What this continued Fed activism will do is to continue altering the functioning of markets, contaminate price discovery and distort capital allocation. Already, the viability of several segments – from money markets to insurance and from pension provision to suppliers of daily market liquidity, all of whom provide financial services to companies and individuals – has been undermined. The Fed has also conditioned many market participants to believe in a policy put for both equities and bonds. And other government agencies are relieved to have the policy spotlight remain away from their damaging inactivity.

Ultimately, however, El-Erian takes an apologist stance toward the Federal Reserve and instead blames American politicians, saying he suspects "that Fed officials feel a moral obligation to act when others won’t...and the last thing they want is to inadvertently contribute to a sluggish US economy that would accentuate the synchronized slowing now taking holding of the global economy."