Fed Governor Lael Brainard was singing the market’s song on Wednesday, and investors should have been listening loud and clear.
The central banker said that the U.S. economy remains far from the Federal Reserve’s goals for employment and inflation, further saying that monetary policy will continue to provide support until further progress has been made.
“Today the economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress.”
She went on to further note that the recovery is playing out unevenly for different groups of workers, sectors and parts of the country, leading to a “K-shaped” recovery. No kidding.
But with the Fed’s newfound focus on full employment and assisting minority communities to achieve economic equity, investors can take her comments to mean that the Fed will keep rates low and their bond-buying program in place for a very long time.
Drowning out everything else you’re hearing amid this volatility, this should certainly be welcome music to the ears of investors, for what could likely be most of 2021.