Not much.

As expected yesterday’s Fed announcement reiterated that the benchmark interest rate will remain low “for an extended period of time.” That key phrase remained unchanged from the previous statement keeping intact the 0.00% – 0.25% target for Fed Funds.

The statement nonetheless contained some useful information. Most of the language was unchanged from the January statement but some small changes provide clues about what The Fed thinks about inflation and the pace of economic recovery.

WHAT CHANGED

Little. The Fed reassured us of their belief in low inflation and reaffirmed targets for unwinding programs such as the purchase of RMBS (residential mortgage-backed securities).

INFLATION OUTLOOK

Yesterday’s statement was identical to January – “inflation is likely to be subdued for some time.” This clears the way for The Fed to keep rates low while promoting the full employment portion of their dual mandate. (Note: Economists define full employment at the ‘natural rate’ of 5% unemployment.)

ECONOMIC RECOVERY/GROWTH

The Fed sees improvement. In January they said, “Deterioration in the labor market was abating.” Yesterday they said, “The labor market is stabilizing.”