A few key takeaways:

• There has been no change in FOMC policy. Replacing "considerable time" with "patient" was because we are moving further in time from the end of QE3 . The first rate hike will be a "considerable time" from October.



• "Patient" means it is unlikely the FOMC will raise rates at the next two meetings (not impossible, but very unlikely). Here is the sentence in the statement: "Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy". Based on Dr. Yellen's comments, it sounded to me like the FOMC will remove "patient" about two meetings before the first rate hike.



• Yellen was not very concerned about the financial crisis in Russia spilling over into the U.S. She said "spillovers to the United States, both through trade and financial channels, would be small."



• Yellen thought the impact of the decline in oil prices on inflation would be transitory, and that core inflation would move towards the Fed's 2% target.



• Yellen made it clear that a policy change could happen at any meeting (not just meetings followed by a scheduled press conference). She said: “Every meeting that we have is a live meeting at which the committee could make a policy decision and we will feel free to do so. I would really like to strongly discourage the expectation that policy moves can only occur when there’s a scheduled press conference.”



• Yellen reminded everyone that monetary policy works with a lag, and that the FOMC has to forecast when a better labor market will lead to higher inflation (not yet, obviously).



• Yellen argued that it is important that the Fed stay independent. She opposes auditing the Fed's policy decisions (the Fed is already audited financially). Of course the people pushing the policy audits have been wrong about everything ... so we are lucky they are not in charge!



Thursday:

• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 295 thousand from 294 thousand.



• At 10:00 AM, the Philly Fed manufacturing survey for December. The consensus is for a reading of 25.0, down from 40.8 last month (above zero indicates expansion).