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.