Update on the Fed. 

The new Yellen Fed met yesterday and gave guidance on the future of interest rates.  As it turns out, the market’s first reaction was negative and Yellen’s first press conference was interpreted in a more hawkish manner than expected. 

What caught the market by surprise was Yellen’s comment that interest rates may start to rise six months after the end of tapering; this new announced timeline is probably six months quicker than most analysts were prepared for.  Tapering is expected to be completed by the end of the year.

The Fed has also mitigated the link between rates and unemployment and indicated that it would look at a broader array of indicators for policy guidance.  The Fed has also indicated that it believes any current slowdown in economic activity is mostly due to “adverse weather conditions.”