The Federal Reserve now only looks at the data it chooses, turning a blind eye to previous cornerstones of policy such as the unemployment rate or PCE deflators.

Comments from National Australia Bank, echoing comments we've had here on ForexLive threads for many weeks/months

More:

  • Fed now looks at market-based measures of inflation expectations which have conveniently been falling and publicly frets about whether increases in CPI will prove to be transitory
  • We've said all along that the Fed places more weight on the stock market than any incoming economic data and that its policy response is tuned to appease equity investors more than anyone else
  • As yesterday's consumer confidence figures showed, the impact of the stock market goes way beyond those who directly or even indirectly own it. When all's well with the S+P 500, it seems all is well in the Eccles Building, Washington DC.

On Yellen's speech:

  • By the end of the speech there were few, if any doubts as to the policy choices favoured by the Fed Chair. A whole host of reasons were given not to raise interest rates, with no urgency whatsoever about resuming the tightening which began so hesitantly in December last year.

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Key takeaway for me:

  • no urgency whatsoever about resuming the tightening which began so hesitantly in December last year.

Which I been sayin' for many months too. I'm still at 1 hike in 2016.