Fed Tweaks Rate Guidance, Lessening Weight on Unemployment Rate

WSJ ^ | March 19, 2014 2:30 p.m. ET | By Victoria McGrane And

[BenLurkin]

In regard to the so-called forward guidance on rates, the Fed has said since late 2012 that it wouldn't consider raising interest rates from near zero until the jobless rate fell to 6.5%, provided inflation looks likely to remain below 2.5%. In a new policy statement released Wednesday, the Fed dropped the reference to the 6.5% jobless rate, which officials have come to see as too limited an indicator of the labor market's health.

Instead, the central bank said it would "assess progress…toward its objectives of maximum employment and 2% inflation" in deciding when to raise rates from near zero, where they've been since late 2008. In judging that progress, the Fed will "take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments," the statement said.

[BenLurkin]

Janet Yellin is tweaking -- not twerking.

[Red in Blue PA]

.....perhaps because the U3 rate used is meaningless and everyone knows it.

[Obadiah]

And we’re ALL thankful for that!

With respect to this latest slight of hand, it would seem that the feds are setting the stage to raise interest rates. Glad I don’t own bonds.

[DannyTN]

".....perhaps because the U3 rate used is meaningless and everyone knows it."

Exactly.

[Buckeye McFrog]

Janet Yellen twerking. Thanks.

Gonna take me the rest of the week to wash
THAT image out of my head.

[BenLurkin]

Bingo!