About eight times a year the Federal Reserve gets together and discusses the economy, inflation, interest rates, and everything else that may cause financial markets around the world to react. Today, they basically repeated their view from the last meeting that the economy faces significant downside risks. However, they failed to give investors any indication of whether or not it was close to unveiling another round of bond buying to stimulate the economy even further. One piece of news that was different from last time was the fact that they mentioned late 2014 as a potential time that they may hike interest rates. This was pushed back from the middle of 2013 that they previously had told us. Also, the Federal Reserve gave us an official inflation target of 2% for the first time ever in a move to move towards greater transparency.
The markets appear to like the announcement as they have moved higher on the session coming well off the lows of the morning. Past performance is no guarantee of future results.
Eric Marvin, CFP®, CRPC®
JPT012512-162
