Well, the language from the Fed statement released this afternoon really didn’t change anything. The verbiage of keeping rates low for a “considerable time” did not change, so the report out of The Wall Street Journal yesterday was basically correct. Now, the FOMC did come up with a new blueprint on how the Fed wants to “normalize” rates in the future, so market participants can now follow along with the Fed in reading economic tea leaves and charting future moves.
As for stocks, trading was quiet leading into the announcement, then gyrated somewhat immediately after the statement, only to settle back to mostly neutral by the close. For the day, the Dow Jones Industrial Average was up 24 points to close at 17,156. The S&P 500 was up 2 points to finish the day at 2001. Gold was down $12 to trade at $1224 per ounce, while oil was down $.72 to trade at $94.16 per barrel WTI.
The bond market did sell off a bit after the Fed decision, but for the most part nothing much changed, as Ms. Yellen looks to be deliberate in her approach. As often is the case, market participants may have been reading way too much into the tea leaves recently. The Fed seems to be on the same path they have been for quite some time, asset purchases are winding down and interest rates will rise at some point, but not right away. Now let’s see what happens in Scotland tomorrow.
Have a nice evening everyone.