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Daily Market Update 3/20/14

Rates moved higher Thursday following yesterday’s press conference by newly installed Fed Chair Janet Yellen.  Investors were surprised when Chairwoman Yellen defined the meaning of a “considerable period” as “about six months”, implying that the Fed might begin raising rates during the first quarter of 2015.  The previous consensus was that rate hikes would not begin until late next year.  Separately, the Fed removed the 6.5% unemployment rate threshold as a possible trigger for raising rates, and confirmed that it will reduce bond purchases by another $10 billion per month.  In today’s economic news, weekly Jobless Claims rose to 320,000, slightly below forecast.  February Existing Home Sales fell 0.4%, in line with expectations, to the lowest level in 19 months.  Leading Indicators jumped 0.5%.  An increase of 0.3% had been expected.  No other key data will be released today.

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