As was widely expected, the Federal Reserve left its interest rate targets unchanged after Wednesday's meeting. But there are a few notable takeaways.
The language was not much changed.
Overall, the language in its press release was barely changed. This makes sense as the big picture is very similar to what the Fed's Federal Open Market Committee saw in December -- namely, that we're probably at full employment but inflation pressure remains modest.
(Editor's note: This article originally appeared at 2:37 p.m. ET Feb. 1 on Real Money, our premium site for active traders. To get great columns like this from Jim Cramer and other top columnists earlier in the trading day, click here.)
That being said, survey data seem to suggest some acceleration in the fourth quarter, so the Fed acknowledged that. In addition, wage growth showed its strongest year-over-year print since the recession. That could certainly be a early sign of inflation pressure. Hence, the Fed added "measures of business and consumer sentiment have improved of late" to the statement.
The Fed also slightly tweaked the inflation language, saying that inflation increased in recent quarters. More on this in a moment.
The Fed wants all meetings to feel live, but ...
The Fed wants a hike in March to be in play. It really wants every meeting to be in play. But it is struggling to pull this off. Fed Chair Janet Yellen has a bad habit of arguing just one side of the case when she wants to nudge the market in one direction or the other.
In other words, if the market is under-pricing the chance of a rate hike, she tends to sound very hawkish; if the market is overpricing, she sounds super dovish. Personally I think this leads to more confusion than benefit.
The small change in the inflation language was probably a nod toward this. Regardless, the fact that this language was barely changed probably means the Fed isn't sold on making a move in March. The very tepid change to inflation language isn't going to make it happen.
There's no obvious signal from the market.
The Fed funds futures market priced in 38% odds of a rate hike in March prior to this meeting, and it is basically unchanged. The bond market generally is off its lows but that happened before the Fed.
I think this would have gotten more reaction from the market (to the dovish side) if we weren't staring a Jobs Friday in the face. No one thought they were going to hike today anyway.
Now we turn to jobs on Friday.
The next jobs report on Friday is all about wages. At this point, variation in the headline number doesn't matter much. It is a question as to how tight the labor market has become. Stay tuned.