The main conclusion remains: A weaker US dollar is the target. Yellen confirmed in the Q&A.
This is an almost unchanged economic outlook, but with a more accommodative monetary policy -= Weaker US Dollar.
She also introduced Fed’s new model: T.R.A.N.S.I.T.O.R.Y…. transitory is the answer to: US dollar strength, inflation & deflation, global slow-down and world peace. Overall the Fed has very little confidence in their own outlook; Yellen went as far as saying: Our economic forecasts are not forecasts!.. Hm……….
Market was looking for possibility of outlook moving to balanced – instead it moved deeper into outlook uncertain. Fed dots is now 2 from Fed and 1.5 from market which is “match”……. But it leaves little confidence in Fed and the economy.
The strategy here is clearly:
Weaker US dollar in fx.
More uncertainty on equity and fixed income….
It feels co-ordinated as Fed action ties in with BOJ and ECB backing slightly down from ZIRP, but I doubt it’s pre-designed but more a conclusion we have advocated a long, long time:
The WEAKER US dollar is the only policy tool which can help stabilise (note not save) the world economy…No one benefit from stronger US dollar in world of debt, deflation and transition a long the lines of my piece today: The Social contract is broken.
Observe US Dollar index for lead and confirmation next 48 hours: