Grandma rocks the market
Posted: Wed Mar 18, 2015 4:48 pm
The Dow jumped 227 points today just on the theory that the first interest rate increase will occur in Oct rather than Sept. That was based on Gradma's statement yesterday.
"The Federal Reserve fired its first warning shot Wednesday that it is going to start hiking interest rates–sometime.
As the global investment community focused its attention on the U.S. central bank, the Fed Open Market Committee lived up to expectations: It dropped the word "patient" from its post-meeting statement, an indication, subtle though it may be, that the era of zero interest rates is about to end.
But the mostly dovish statement made little fanfare over eliminating the word, and in fact stated specifically that "an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting," a phrase missing from previous communiques.
"Just because we removed the word 'patient' does not mean we will become impatient," Fed Chair Janet Yellen said at a post-meeting news conference.
"The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the statement said.
Stocks quick turned positive, with the Dow up 100 points 5 minutes after the statement was issued. Yields on US 10-year Treasurys fell below 2 percent for the first time since Feb. 25. The dollar weakened."
"The Federal Reserve fired its first warning shot Wednesday that it is going to start hiking interest rates–sometime.
As the global investment community focused its attention on the U.S. central bank, the Fed Open Market Committee lived up to expectations: It dropped the word "patient" from its post-meeting statement, an indication, subtle though it may be, that the era of zero interest rates is about to end.
But the mostly dovish statement made little fanfare over eliminating the word, and in fact stated specifically that "an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting," a phrase missing from previous communiques.
"Just because we removed the word 'patient' does not mean we will become impatient," Fed Chair Janet Yellen said at a post-meeting news conference.
"The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the statement said.
Stocks quick turned positive, with the Dow up 100 points 5 minutes after the statement was issued. Yields on US 10-year Treasurys fell below 2 percent for the first time since Feb. 25. The dollar weakened."