Fed likely to maintain low rates for a considerable time

Significantly, it added that it is sees this guidance as “consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October […].”

Wall Street rose sharply following the release of the statement, which has initially been interpreted as signaling the monetary authority is content with continued patience when initiating the cycle of interest rate increases.

As of 19:37 the Dow Jones Industrials was rising 1.45% to reach 17,317 points, followed by a gain of 1.69% in the Nasdaq Composite to 4,625 and an advance of 1.59% to 2,005 out on the S&P 500.

In her post-conference speech Fed chair Janet Yellen said it’s unlikely the monetary authority will raise rates “for at least the next couple of meetings.”

If taken at face value that would mean a first hike in the Fed funds rate would not arrive until April at the soonest.

Indeed, some market observers are pointing out how inflation, as measured by the consumer price index, is expected to fall towards zero per cent towards the middle of next year.