It is important not to place too much emphasis on the stock market's initial reaction to a Fed decision, but thus far it has been positive and it is easy to understand why.

We might be on the brink of Congress agreeing to a $900 billion fiscal stimulus relief package, yet the Fed chair, who said the case for more fiscal stimulus is very, very strong right now, made it abundantly clear in his press conference that the Fed is nowhere near being on the brink of raising interest rates or backing down on its asset purchase plans.

That's not a surprise at this juncture, but for the stock market it is a soothing reminder.

The bias toward maintaining extraordinary policy accommodation is evident in the Fed's median interest rate projections which call for the fed funds rate to remain unchanged through 2023 even with upward revisions to GDP growth for 2021 (to 4.2% from 4.0%) and 2022 (to 3.2 from 3.0%).

Mr. Powell also sounded remarkably sanguine about potential inflation pressures arising, saying that any pickup in inflation due to increased vaccination efforts releasing pent-up demand is apt to be a transient spike in inflation. Translation: it will only be temporary.

Here again the Fed's median projections for PCE price inflation speak to that view as they stand at 1.8% for 2021, 1.9% for 2022, and 2.0% for 2023. In other words, even with all the policy accommodation here and around the world, Fed officials don't see inflation getting out of hand.

The question is, will the capital markets maintain the same sense of assuredness over the forecast period?

For now, they appear content with the Fed's messaging, which amounts to keeping the pedal to the metal in terms of providing monetary policy accommodation (i.e. rates at the zero bound, Treasury and agency-MBS asset purchases at a pace of at least $120 billion per month, and teasing the idea that even more can be done if necessary) and quieting underlying concerns about inflation pressures and equity valuations.