Fed delivers the goods

When Janet Yellen promises, she delivers. That is the message many will take away from the Federal Reserve decision tonight. 

Janet Yellen
Source: Bloomberg

While the press conference is still to come, hopefully bringing with it more clarity on the path for 2016, the absence of dissent and the retention of ‘gradual’ in the statement will mean that, for the next two weeks at least, stock markets can look forward to further gains.

Compared to the volatility that might have transpired had they ducked the decision, the reaction has been muted, but then that is probably the outcome Janet was looking for.

The problem now is that the easy part is done with. Now attention turns to the path of further rate increases in 2016 and beyond.

Given her careful positioning over the course of the past year, it is highly likely that Ms Yellen will seek to keep all her options open.

We became used to the phrase ‘data dependant’ in recent months, but it is a refrain that will serve the Fed well in coming months. Perhaps, for now at least, we can all just look forward to Christmas.

 

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