Someone please wake up the FED! Wow, didn’t see that crazy statement coming. Effectively the Fed took away the work “Patience” and replaced it will a dual criteria that is more nebulous than ‘patience’. 1) They will watch to see if inflation continues recede from the 2% benchmark looking forward. With that in mind can someone remind them energy costs have had some impact on this event. 2) They want the quality of jobs to improve. Really… now they are worried about quality. How are they going to measure quality? For the last two plus years many have been blowing the trumpet of the current administrations ability to lower the rate of unemployment create jobs. Now they aren’t quality jobs? This is like taking two steps forward the last five months and now taking three steps back into a room and someone turned out the lights. Clarity is a key component of the markets and this is not going to do a damn thing going forward. Micro term yes… but the market likes to look out six months. HELLO is YELLEN AT HOME?
Now, if I where a conspiracy theorist I would believe this was set up by the those (White House, large cap stock companies, etc.) who believe a strong dollar is hurting too much short term, and one sure way to get the dollar to react is to make others think the Fed isn’t going to act on interest rates. The dollar fell 2% today, oil jumped 4% today, the euro rallied, Europe stocks jumped 2%, emerging markets rallied on the weaker dollar and gold jumped 2%… sounds awfully fishy to me. Just glad a I am not into that kind of thinking.
Versus attempting to go through all the impact of this news today I made a video that goes through all the ripple effects and what to watch going forward.
More to come in the AM updates.