submitted by jwithrow.
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?