Salient to Investors:

Mohamed El-Erian writes:

  • Analysts will be hard pressed to explain how equity markets ended unchanged on the day of an unprecedented policy announcement from the Fed. The Fed’s shift to employment and inflation thresholds was a surprise as most analysts expected this would not occur until March 2013 at the earliest.
  • Investors realized that there is a material risk of complications.
  • Expect the shift to quantitative thresholds to lead to greater daily volatility, especially around data releases.

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