Low interest rates to last a long time….The Fed

….Under the new approach, the Federal Reserve will seek to achieve inflation averaging 2% over time, offsetting below-2% periods with higher inflation “for some time,” and to ensure employment doesn’t fall short of its maximum level.

“Their new language gives them the flexibility to let the economy run a little hotter before contemplating raising interest rates and gives the green light to more modest yield curve steepening and dollar weakness,” analysts at ING said, in a research note.

The need for an accommodative policy was illustrated by Thursday’s weekly claims data which showed some 27 million Americans are still receiving some kind of government unemployment assistance.

Turning back to Europe, the German GfK consumer climate index disappointed, with the September figure dropping to -1.8 from -0.2 in August, a development that parallels the revival of the coronavirus in a country that had handled the first wave better than most.