Why Stock Investors Can Now Relax for a 'Considerable Time'

NEW YORK (TheStreet) -- The Federal Reserve had good news for stock investors on Wednesday -- and the market responded in kind.

The Dow and the S&P 500 hit fresh highs, although they fell back by the close.

The fact that the central bank will keep interest rates low for "a considerable time" means that investors will be in a favorable market environment well into 2015.

Read More: 10 Stocks Carl Icahn Loves in 2014

What's behind this?

In terms of economic growth, the projections by Fed members for the next four years are very similar to the past five years. That is, the economic recovery will continue at the same pace we've already seen.

The highest annual projection for the next four years is a growth rate in real GDP of 3.2%, and this is expected to come in 2015. Otherwise, the highest projection for 2014 is 2.3%; for 2016, 3.0%; and for 2017 the high is 2.6%.

For the "longer run," Fed officials see the range of economic growth being in the range of 1.8% to 2.6%. This is far below what was achieved in the 50 years leading up to the Great Recession.

As for inflation, these officials see inflation running around 2.0%, both in both terms of personal consumption and "core" spending, which excludes food and energy.

So, what is this saying? In spite of all the liquidity the Fed has pumped into the banking system, economic growth is just going to continue to be modest. Apparently, the Federal Reserve can't do anything about this.

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