BREAKING NEWS: FOMC Announcement, QE to End Next Month

The Federal Reserve Board (Fed) after its meeting of the Federal Open Market Committee (FOMC) has left rates near zero and has stated quantitative easing (QE) will end next month. After years of being very clear, investors are now scrambling to hear two words when Fed Chair Janet Yellen speaks.

These words, or phrase, is “considerable time.” If Yellen sticks to the playbook and utters these words i her rather lengthy statement, then we can expect interest rates to remain near zero for a lengthy time or until sometime in mid 2015. Any changes in language  will rile the markets. New language will add confusion and the markets do not like confusion.

The equities markets are hoping the rates remain near zero for a considerable length of time, and even after current expectations for them to rise.

Yellen is scheduled to speak within the next 20 minutes. Equity markets have turned lower after the Fed release.

UPDATE:

The FMOC will remain on its easy money course for the time being. This the message we got today.

The Fed statement has eased investor fears of  them raising rates anytime soon. The statement retained key provisions despite the recent rumblings of possibly tightening policy sooner than expected. They also left the key phrase “a considerable time” after ending the current QE in October.

Any change in language could have been interpreted that rates would be hiked sooner than markets hoped.