What the Fed Really Means When It Says Interest Rate Raises are Data Dependent

For the past year, the Federal Reserve's policy committee, the Federal Open Market Committee (FOMC), has described the timing of its much-anticipated move to raise interest rates as "data dependent," or some variant of that phrase. But what exactly does that mean? And does the phrase accurately convey how the FOMC is thinking about the economy and interest rates? FOMC minutes from June and July 2014 suggest that the introduction of the phrase "data dependent" had the express goal of keeping markets from growing complacent. In June, some FOMC members expressed concern that "low implied......(read more)

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