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Good News — and Opportunity — for Equities: Top Economists

The Federal Reserve left interest rates near zero and vowed to keep them there for a while, to nurture an economic recovery stifled by stubbornly high unemployment. What does this mean for the economy and markets going forward? Experts Ken Volpert, portfolio manager at Vanguard Funds, Kenneth Heebner, portfolio manager at Capital Growth Management, and Bob Doll, vice chairman and global CIO of equities at BlackRock, shared their insights.

Volpert told CNBC that he expects another few dissents before the language in the Fed FOMC changes.

Reaction to FOMC

“We have a quantitative easing that needs to end soon,” he said.

“And the Fed is very interested to see how the markets will respond when it’s not there anymore."

"Before they start changing the funds rate, they want to see how the markets digest that," Volpert said. "So I would expect that by end of the second quarter, that language will be gone or modified in a significant way.”

So what does mean for investors?

Heebner said the recent market pullback is caused by factors that will not turn out to be fundamental problems.

“We have several years of global growth with very low or very little inflation ahead of us," he said. "This is a buying opportunity for equities because it is just a correction triggered by some worries that will turn out not to be problems.”

In the meantime, Doll said he does not expect the Fed to raise interest rates until unemployment rates start to fall.

“Until there’s evidence of job growth, the Fed is going to move very slowly," he said. "In the meantime, we have an economy that is slowly but surely in a ragged way picking up strength—we have some earnings growth to prove it and that’s good news for equities.”

However, Doll said he believes rates will start to slowly go up by the end of this year.

“Rates are at zero—that connotes an emergency—and we think the emergency is slowly but surely passing," he said. "So they will get started before the end of the year…just beginning the move up before the end of the year, to signal that the emergency is passing.”

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No immediate information was available for Heebner or Volpert.