It's going to be a loooooong haul of financial repression for the saver class. Based on comments in minutes the Fed is going to be moving to "easy money until these economic conditions are in place" rather than a date – hence no need to keep kicking the can out 6-9 months every few meetings. Also more QE to replace Twist seems favored by a "number" of officials (no shock). The market had its normal pavlov dog response spiking on that news but has since retreated back to where it was before the minutes. Full minutes here.
The minutes of the Oct. 23 and Oct. 24 meeting showed that the 19 Fed officials "generally favored" the use of economic variables in their guidance. At the moment, the Fed is relying on a calendar date, saying it expects to keep rates near zero until mid-2015. The new approach would be some variant of a plan offered by Chicago Fed President Charles Evans, who wants the central bank to tell the market it will keep rates low until the unemployment rate falls below 7%, as long as inflation remains below 3%. The minutes show that a number of practical issues need to be solved before officials would decide to use these "economic thresholds."
Any securities mentioned on this page are not held by the author in his personal portfolio.