Aren’t fixing inflation targets and locking down interest rates contradictory statements?
I am very sceptical of this little bounce off the words ‘historic’ which are crossing the wires. “In historic shift, fed sets inflation target.” Wow. So if I understand (which I obviously don’t) on one hand, we’re printing money, for more jobs and to save the banks, fine. I can buy that. But we’re also printing money and have been for a few years. This is inflationary. Period. It raises our default risk but with luck will lower our $15,000,000,000,000.00 + national debt, great. Inflation will also makes pickles, beef, homes, etc. more expensive, and I like pickles. So how is setting an inflation target at 2.0% even remotely believable? This is pure marketing. I can print because I have a target. There’s a 100% chance they won’t hit their target.
For the moment the markets are buying it. It’s Dollar negative which is boosting the Euro, Gold, and Silver.
Update: Very well said ZH!
Not sure what to make of a market that traded relatively poorly on strong apple earnings but managed to rip higher on a relatively neutral fed statement.