Forget the Federal Open Market Committee’s pledge to be “patient” in raising rates from near zero. Forget “considerable time” and unemployment “thresholds.” The new buzzword at the Federal Reserve is “reasonably confident.”
That’s the phrase Chair Janet Yellen and her colleagues at the Fed used in the statement this week to describe their need to feel pretty sure that inflation is on the way back to their 2 percent target before liftoff.
In her press conference on March 18, Yellen laid out the markers for what “reasonably confident” means. While “I don’t have a mechanical answer for you,” there are four targets that matter.