In One Sentence, Here's Why The Market Is Surging On Today's 'Taper' Announcement

Citi currency analyst Steven Englander explains why the market is surging on the news that the Fed will scale back its pace of asset purchases. Here's the sentence, and then below the explanation:

The Fed Statement is being viewed as a very dovish tapering - small reduction in purchases, indication weakening of unemployment trigger, UR trigger now conditional on inflation, no date for end.

So let's break down what that means:

-- The reduction in purchases is very small.

-- The Fed has made really clear now that the 6.5% threshold at which it might consider raising rates is a very weak threshold, meaning that in all likelihood it will wait a long time after that before the first rate hik.

-- The Fed will not raise rates as long as inflation is super-low.

-- There's no hard end to QE, even though the taper has begun.

That's why the Dow is up 200.

For LIVE coverage of Bernanke explaining his decision, see here.