The US Federal Reserve has maintained a dovish stance as it sees a stronger economy and higher inflation going forward but no rate hikes at least through 2023.

By saying so, the Fed has sent a clear message – neither strong growth nor inflation at-or-slightly-above 2.0 percent will necessarily lead to rate hikes.

There were two specific things in the policy that made the market read the policy as dovish. One, the median 2023 Dot remained at no hikes. This even as Fed’s 2022 median inflation projection reached 2.0 percent and 2.1 percent in 2023.

Second, despite the Fed assuming a positive shock in 2021, its outlook beyond has changed relatively little – subdued growth/unemployment projections.

Watch the accompanying video of CNBC-TV18’s Prashant Nair to know why markets are pleased with the Fed.

(Edited by : Abhishek Jha)