Stocks appear on track to start today’s session modestly in the red, which isn’t surprising following the strong move yesterday in response to the Fed announcement.Here is what I shared with you ahead of the Fed announcement on Wednesday morning: “The market’s fixation on the word ‘patient’ notwithstanding, it will be even more important to keep an eye on the committee members’ projections and Yellen’s press event. Lowered GDP and inflation projections would be acknowledgement of the recent dollar strength and would be a clearer dovish signal than any verbiage in the statement.”
And that’s exactly what the markets took away from what the Fed said yesterday. The Chairwoman referred to the dollar strength as a restraint on growth and inflation multiple times in her press event, highlighting the fact that the committee took the exchange rate issue very seriously. Currency market players interpreted this correctly by pushing the dollar sharply down on Wednesday, though it seems to have crept back up relative to the common currency today. Bottom line, the Fed ensured yesterday that market participants clearly picked its signals that it will remain ‘patient’ in raising rates even though it stopped saying it explicitly.In corporate news, Target ( TGT ) is following the lead from Wal-Mart ( WMT ) and TJX Cos. ( TJX ) in announcing a hike to its minimum wage. The move was largely expected and a function of the competitive dynamic at the low end of the labor market, which has been tightening materially lately as a result of the drop in the unemployment rate.
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