In the grand scheme of things the Fed will not cause too many ripples on the cosmic screen of economic life by moving forward with monetary policy normalization at this (September 2015) FOMC meeting or by delaying that move.
In the United States, investors are probably waiting to see the results of some company earnings before deciding on what to do with their long equity holdings. The second quarter reporting season has already started and will kick into a higher gear next week.
The U.S. Comex gold futures jumped 2.14% to $1,202 on Thursday, climbing the most since May 13 thanks to the more tempered outlook from the Fed’s Chair. The S&P 500 Index rose 1.21% while the Euro Stoxx 50 Index was flat in the past two days.
The Federal Reserve has maintained its Fed Funds rate at 0% (the so-called Zero Interest Rate Policy or ZIRP) for fully six-and-a-half years in an effort to stimulate the economy and bring down the unemployment rate. The Fed Funds rate will be at the same level come this time tomorrow, despite encouraging signs of a “spring thaw” in economic activity.