By Debbie Carlson
Kitco News
Federal Reserve Chair Janet Yellen’s comment insinuating that the first interest rate hike may come about six months after the Federal Reserve’s quantitative easing program ends shook financial markets late Wednesday and the reverberations continued into Thursday.
Although Yellen emphasized there was no change in the Federal Open Market Committee’s policy intentions, the markets focused on what she meant by a “considerable period” between the end of the asset-purchase program and the first rate hike. When asked during her first press conference what the FOMC meant by considerable period, she suggested it could be around six months.
The Fed said Wednesday it would cut its bond-buying program by $10 billion a month, with it now standing at $55 billion. If the central bank keeps up this current pace, it could be done by October. Economists and market participants added six months to the October date and calculated the first rate hike would occur in the second quarter, which is slightly earlier than the third-to-fourth-quarter forecast 2015 most have expected.