As expected, the Fed continued to taper its asset purchases and dropped its explicit unemployment rate threshold, reverting to a more qualitative form of forward guidance in today's policy statement. What we hadn't anticipated is that FOMC participants would raise their interest rate projections, albeit only modestly. The median FOMC forecast now puts the fed funds rate at 1.00% by end-2015, up from the 0.75% projection made last December, and 2.25% by end-2016, up from 1.75%.
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