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New Fed Policy: Average Inflation Targeting


From the desk of Dan Seder, CFA, CMT, CFP®

In a subtle but important change to policy, Fed Chairman Jerome Powell confirmed yesterday that rates will stay at rock-bottom levels for longer. The Fed will be less apt to raise rates until unemployment is low, and inflation proves to sustain moderately above the long-term target of 2%. While these are highly uncertain times, this policy move should favor stocks over bonds for the foreseeable future.