The new word is “patient.” And it’s a humdinger.
The Dow Jones Industrial Average soared more than 700 points over two days last week after Federal Reserve Board Chair Janet Yellen announced that the Fed will be “patient” about ending its easy money stance.
It took three months of hard work for the Fed to come up with the new word, but apparently it was time well spent.
In September, as we’ve reported, the Fed announced that it would wait a “considerable time” before raising interest rates. That caused much fretting. Media such as The New York Times devoted entire articles to what the Fed meant by “considerable.” Pundits, who apparently have the power to read minds, determined that “considerable” meant that the Fed would begin raising rates in the summer of 2015.
We missed the economics classes where the definition of “considerable” was determined to mean “10 months from now,” but apparently such classes exist, as practically every pundit agreed on the timeline.