Very interesting paragraph published today…
”…even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”
This is why the markets are skyrocketing. As I commented this morning the market direction was going to depend on what did Yellen say.
This paragraph is game changing and in my opinion the reason for today’s rally. Basically it means that the interest rates are going to be low even during the first quarters when inflation targets are achieved. This means for a long time and this is extremely positive for the market.