The Federal Reserve announcement today was closely watched due to yesterday’s .4% CPI print; showing the biggest cost of living increase since February 2013. This may cause inflation “hawks” to push for raising the federal funds rate. Today’s adroit message at the press conference with Chairperson Yellen caused both debt and equity markets to rally. The ten year yield closed at 2.58% after hitting a high this week of 2.66%. The old pre-crisis paradigm of an inverse relationship between debt and equity markets no longer exists. Both markets rallied as the Fed slashed GDP growth forecasts downward to 2.1-2.3%; from 2.8-3%. This less robust forecast mirrors the IMF’s recent downward revision to 2%. The projection in US economic growth suggests that the Fed is “nowhere near raising short term rates”. Bond and equity markets were bid as they react more to possible future stimulus than they do to price/earnings fundamentals. The overall debt market rally is a boon to the competitive CMBS market as spreads continue to compress with full leveraged rates available to borrowers. …stay tuned…　 David R. Pascale Jr. & Matt Kerchner