Thursday, January 29, 2015

Fed Tells Markets It Will Be A Patient and Gentle Lover, Markets Puke a Little

From Real Time Economics:

7 Takeaways From the January Fed Statement: ‘The Committee Judges That It Can Be Patient’ 
What caught our eye in the Federal Reserve’s January policy statement released Wednesday.

No Rate Hikes Until at Least June as Fed ‘Patient’
Fed officials have reaffirmed their assurance they are likely to remain patient in considering the timing of the first interest rate increase since 2006. That, according to Yellen, means no lifting rates from zero for at least another two policy meetings.—Pedro Nicolaci da Costa

Fed Upgrades its Assessment of Job Gains, Economic Growth
The Fed is feeling a little better about the state of the job market and economic growth more broadly. The statement says economic activity has been expanding at a “solid pace,” versus December’s description of a “moderate pace.” The statement calls recent job gains “strong,” an upgrade from last month’s “solid” job gains. But the Fed also added language about inflation heading lower due to falling energy prices. —Ben Leubsdorf

Fed a Bit More Worried About Inflation Outlook
Fed policy makers still believe U.S. inflation will return to the central bank’s 2% target after dipping further in the near term due to oil’s slump. But their confidence is showing signs of fraying. In particular, the Fed today flags a substantial decline in market-based inflation compensation. In December, they had described those expectations as having fallen “somewhat further.”—Pedro Nicolaci da Costa
You can probably figure out the time the release came out: