After six years and two months of 0% interest rates with three rounds of quantitative easing (QE) in between, the federal reserve chose to finally remove the word “patient” from their official statement. Hawkish at last! Not so fast. I once heard that you should never underestimate the dovishness of Janet Yellen and she delivered on that reputation on Wednesday.

In a grand gesture of appeasement, the Fed took a hatchet to their projections (called “dot plots”) for the path of the Fed Funds rate. A few weeks ago I wrote about the wide gapbetween market expectations (Fed Fund Futures) and Fed's dot plots. The market was still dreaming of doves, I explained, and aggressively calling the Fed's dot plot bluff.

Well, those dreams came true yesterday as the Fed chose to move significantly closer to the market, shifting its dot plot projections lower in 2015, 2016, and 2017. From the previous 2015 year-end median rate of 1.125%, they moved all the way down to 0.625%. This signifies a shift from 4-5 rate hikes in 2015 to only 2-3.

Market expectations moved lower as well, with Fed Funds Futures now pointing to the first rate hike as far back as October and a year-end rate on only 0.425% (indicating 1-2 hikes). The implied odds of a hike in June, which many had been talking about as possible before the meeting, moved all the way down to 9%.

In a euphoric ramp reminiscent of so many dovish-leaning statements over the past few years, equity markets exploded higher with algorithmic traders keying off the shift in dot plots. If you hadn't seen the release, you might have thought by this reaction that a 4th round of quantitative easing had been announced. That's how dependent the market has become on a continuation of 0% Fed policy.

If there was any doubt left that by removing “patient” it actually meant something more hawkish, Dr. Yellen set everyone's mind at ease in saying the following: “just because we removed the word “patient” from the statement doesn't mean we are going to be impatient. Moreover, even after the initial increase in the target funds rate, our policy is likely to remain highly accommodative.”