Last week, at the conclusion of the Federal Open Market Committee’s regularly held two-day meeting, we learned pretty much what most analysts expected. The FOMC decided to continue with its ongoing reduction in the size of asset purchases, again by another $10 billion. This means that, beginning July, the central bank’s total purchases of U.S. Treasuries and mortgage bonds will amount to a total of $35 billion per month.

Of course, as you know, the Fed goes to great lengths to telegraph its intentions ahead of time; market participants also scrutinize every word of the Fed statement and review all speeches and interviews of the Fed officials for more insights into the future policy moves.

The market did move higher after the decision was announced, mostly on the absence of any real change. In the press release that accompanied the news the Fed officials didn’t indicate a change of direction either.

On the other hand, the Fed still highlighted the elevated unemployment rate and also stressed slow recovery in the housing sector. The long-term expectations for inflation, according to the Fed, remain subdued: “Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable,” stays the statement, in exactly the same language as before.

Moreover, at a press conference after the FOMC meeting, Janet Yellen downplayed inflationary pressures. This is especially welcome language after the latest CPI release, which showed the annual inflation accelerating to a 2.1 percent rate.

Last month, consumer prices rose at the fastest rate they had logged in more than a year. The cost of living rose at a 0.4 percent rate in May, the largest increase since February 2013, the U.S. Department of Labor reported.

Considering that Fed officials have also reduced their growth forecast for the year, from a range of 2.8 to 3 percent to expected 2.1 to 2.3 percent, and with the job market described by the Fed as still in recovery, its easy policies can be expected to stay with us for longer.

And indeed, the job market continues to improve. Initial jobless claims fell further, by another 6,000, last week, in a sign of a steady but slow improvement. The pace of layoffs is slowing, although long-term unemployment and underemployment remain problems.

Meanwhile, home construction stabilized after a decline in the first quarter. In other data recently reported for May, the Labor Department said that builders broke ground at an annualized rate of 1 million homes, after the annualized rate of 1.07 million clocked in April. That represented the best two months since late 2013.

Amongst our stocks, last week one of our Pharma picks announced an acquisition that has the potential to expand their product portfolio in a key disease area.  As clinical trials for potency and safety begin, we will of course continue to monitor all activity and provide updates.