What the Fed Decision Means for Stocks and Bonds and How I'm Playing It

Today's Federal Reserve Open Market Committee meeting ended with no change in interest-rate policy, as was widely expected. However, there are some crosswinds facing the Fed that will have major implications for both stocks and bonds. Here is my take on where the Fed is now and what comes next.

Inflation: Mission Accomplished?

The Fed might have opened this meeting with a champagne toast. The Core PCE deflator, which is the central bank's preferred measure of inflation, came in at 1.9% for the 12 months ending in March. That measure was at just 1.3% as recently as August, far away from the Fed's stated target of 2%. At the time the Fed told us that temporary measures were holding inflation down and it would soon rebound. Not only was their interpretation of the data now vindicated, their decision to continue with rate hikes is also vindicated....910 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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