Citing a stronger economy, the Fed announces a patient approach to rate hikes in 2015. Shartia Brantley reports
The Fed gave investors an early Christmas gift by emphasizing a "patient approach" to raising rates as the economy continues to improve. Fed Chair Janet Yellen: SOUNDBITE: JANET YELLEN, CHAIR, FEDERAL RESERVE (ENGLISH) SAYING: "As progress in achieving maximum employment and 2 percent inflation continues, at some point it will become appropriate to begin reducing policy accommodation. But, based on it's current outlook, the Committee judges that it can be patient in doing so. " Stocks rallied on the news, with major market indices reversing three days of losses. Reuters Columnist, James Saft: SOUNDBITE: JAMES SAFT, COLUMNIST, REUTERS (ENGLISH) SAYING: "So upshots for the financial markets straight forward. Risk is on. Equities should love this and even high yield and credit will benefit because the Fed is not going to be crashing those markets on purpose anytime soon. Emerging markets are a huge beneficiary, really good news for them." And any rate rise will be dependent on incoming economic data. LPL Financial's John Canally: SOUNDBITE: JOHN CANALLY, CHIEF ECONOMIC STRATEGIST, LPL FINANCIAL (ENGLISH) SAYING: "It really does depend on the data and the Fed stressed that again. That they said what they are going to do is dependent on the data. How quickly the labor market improves." For now, investors expect a gradual increase in interest rates starting in mid-2015, and today's rally says the market is just fine with that.