New York CNN Business  — 

The Dow (INDU) roared higher Thursday after Federal Reserve Chairman Jerome Powell revealed the central bank’s new policy strategy, which will essentially keep interest rates lower for longer.

Thanks to the boost, the Dow briefly turned positive for the year for the first time since the pandemic hit.

The index closed up 0.6%, or 160 points, in the early afternoon.

It has been a big week for the Wall Street index, which went through a reshuffle on Monday. Salesforce (CRM), Amgen (AMGN) and Honeywell International (HON) will join the index, replacing Exxon Mobil (XOM), Pfizer (PFE), and Raytheon (RTN), S&P Dow Jones Indicies said in a statement Monday. The changes go into effect Aug. 31.

The Dow had been the laggard of the three major US stock indexes since stocks rebounded from the pandemic selloff in March. The S&P 500 (SPX) is up more than 8% for 2020, and the Nasdaq Composite (COMP) has rallied nearly 30% this year. The S&P finished at an all-time high on Thursday – its fifth in a row – closing up 0.2%. The Nasdaq finished 0.3% lower.

CNN’s Fear & Greed index meanwhile flashed “extreme greed”.

The market got a boost from Powell’s speech at the virtual Jackson Hole monetary policy symposium Thursday morning. Under its new policy framework, the Fed will allow inflation to climb above 2%. That means interest rates will stay lower for longer, which is good for companies and therefore supportive of the stock market.

Central banks in developed economies around the world have been grappling with low inflation for years, and some experts argue that central banks should totally abandon inflation targeting. The Fed isn’t going quite that far, but this change is still significant.

Prices for US Treasury bonds fell slightly, and the yield for the 10-year bond inched higher at 0.7%. Bond prices and yields move opposite to each other.

“Over time, rising inflation expectations should become embedded in the price on long term bonds and lead to a steepening of the yield curve,” said Rikkert Scholten, a Global Fixed Income Strategist at Robeco in emailed comments. “However, for the coming years we forecast a continuation of controlled yield environment for US rates.”

In other words, Treasury yields won’t jump higher any time soon.

“The Fed is the new BOJ,” joked Edward Moya, senior market analyst at Oanda, in a note to clients in reference to the Bank of Japan, which has arguably the most accommodative monetary policy among developed world central banks.