Why investors can stop freaking out over the Fed

All year long, the market has been sending a message that the Fed until recently refused to heed — namely that the central bank's desire to raise interest rates on a regular basis isn't going to happen.

Now, "lower for longer" is working its way into replacing all of the various wordplay incrementalism that has marked Fed policy statements and speeches. Markets have been obsessing over a central bank that has time and again been unable to deliver on its promises — or threats, depending on your perspective — to normalize interest rates after eight years of highly accommodative policy.

But the idea that the Fed is stuck in the low-rate regime for longer than virtually anyone imagined is slowly taking root, and is the subject of much discussion and analysis on Wall Street.

"Are super-low interest rates here to stay? There is a growing consensus that they are," Josh Feinman, chief global economist at Deutsche Asset Management, said.

Feinman starts with the premise that the "neutral rate," or the short-term rate needed to keep the economy growing and inflation stable, is lower than most experts believed.

While some may like low rates, abnormally low ones aren't a particularly good sign. In the current climate, they indicate weak growth both in the U.S. and abroad as the Fed finds itself constrained from hiking as its peers hold rates in low and sometimes negative territory.

"I believe it is going to be lower for longer, and I thought that for the last year and a half," said Michael Yoshikami, founder and CEO of Destination Wealth Management. "All this hand-wringing about what adjectives the Fed is using on a quarterly basis is not only nonproductive, but I don't think it's accurate."

"How many times does the Federal Reserve have to say they're concerned about inflation and take it back a month later until people realize that the words are not necessarily going to lead to action?"