This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

With Economy Softer, Yellen's Fed Doesn't Tap the Brakes

NEW YORK (TheStreet) -- Janet Yellen replaced one question with another. If people were asking before what the Federal Reserve would do to interest rates once the unemployment rate went below 6.5%, surely they are now scratching their heads over what the central bank's target of "maximum employment" really means.

"In determining how long to maintain the current 0 to 1/4% target range for the federal funds rate, the Committee will assess progress -- both realized and expected -- toward its objectives of maximum employment and 2% inflation,'' the Fed said in the first post-meeting statement of the Federal Open Market Committee since Yellen became its chair in January.  

And with that, the central bank's 6.5% unemployment target officially bit the dust, replaced by a standard that raises at least as many questions. 

In a press conference, Yellen put some meat on the bone, but the picture was more or less what Fed watchers have been piecing together on their own.

She emphasized measures like the high level of involuntary part-time employment among workers who can't find full-time work, the dropping level of labor force participation (though she, like her predecessor Ben Bernanke, said the dip mostly represents a wave of Baby Boomers retiring) and the difference between the short-term unemployment rate and the still-unusually high rate of people unemployed for longer than six months.

For now, the change in language about what could change the Fed's policy leads to little change in the policy itself. The Fed is still going to leave rates that it controls near zero for at least another year, while reducing its purchases of Treasuries and mortgage bonds that have been keeping market interest rates low.

Thirteen of the 16 FOMC participants at this meeting think the central bank will first raise the fed funds target rate in 2015 -- nearly unchanged from the 12 Fed governors and regional Federal Reserve Bank presidents who thought so in December, the last time the Fed released the data. 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%
YHOO $45.10 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs