fed-speak federal reserve

submitted by jwithrow.fed-speak

The following is a brief retrospective of the Fed’s promises about how long the fed funds rate would stay near zero, otherwise known as fed-speak.

Starting six years ago, the Fed promised rates would remain “exceptionally low”…

• … first “for some time” (December 2008)
• … then “for an extended period” (March 2009)
• … which morphed into a target date of “at least through mid-2013” (August 2011)
• … stretching to “at least through mid-2015” (September 2012).

Only three months after that last revision, the Fed threw out the chronological playbook and opted for numerical targets…

• … “as long as the unemployment rate remains above 6.5%” (December 2012)
• … “well past the time that the unemployment rate declines below 6.5%” (December 2013).

When Janet Yellen took over from Ben Bernanke, the targets became based on the anticipated wind-down of quantitative easing (QE)…

• … “for a considerable time after the asset purchase program ends” (March 2014)
• … “for a considerable time following the end of its asset purchase program this month” (October 2014).

What’s going on here?

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