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.
Why “Patient?”
So how did the Fed settle on “patient” and why has it been such a hit (at least in its first two days of existence)?
The standard issue Federal Reserve Board Thesaurus was tattered by the experience. Focus groups were locked in windowless rooms until they became unhinged. Surveys were taken and retaken. (Or at least we imagine that’s what happened.)
Finally, there was a two-day meeting of the board itself. The minutes will not be released until whenever, but we suspect the dialogue went something like this:
Chair Yellen: “Alright, no food until we come up with a new word. No water until we come up with a new word. No bathroom breaks until we come up with a new word.”
Two hours later, sans bathroom break.
Charles Plosser: “We’re running out of patience.”
Chair Yellen: “That’s it! Patience! Let’s shorten it to patient and call it a day.”
The difference between “patient” and “considerable” is, ahem … considerable. The word “considerable” stretches to five syllables spanning 12 letters. In today’s era, ADD sets in after three syllables. Think about how many high frequency trades could take place in the time it takes just to say the word.
So the Fed has slimmed down to the more efficient, more fit, compressed “patient” – just two syllables and seven letters.
The angst created by the Affordable Care Act may have made the word “patient” a less desirable noun, but it still works as an adjective. Consider the meaning of the word. The first definition in the American Heritage dictionary is, “enduring pain or difficulty with calmness.” The word could apply equally to the Fed or to anyone reading the minutes of recent board meetings.
So with “patient,” we’re describing a character trait … “patience” is often associated with “wisdom.” It even has sort of a feng shui quality to it. Slowly mouth the word “patient” and feel the energy flowing over your tongue. The word is as calming as Prozac.
For “considerable,” meanwhile, the first definition is “large in amount, extent or degree.” Matching “considerable” with “time” creates ambiguity and is subject to personal interpretation. Waiting for a doctor’s appointment or a car repair can seem like an eternity, but the doctor or mechanic may think they’re speeding through the day.
Dissent into the Maelstrom
This time element so unnerved Director Plosser, he dissented from the latest policy statement.
The policy 734-word statement, buries the word “patient” in the middle of a 238 word paragraph, using it in the following sentence: “Based on its current assessment, the (Federal Open Market) Committee judges that it can be patient in beginning to normalize the stance of monetary policy.”
It’s what follows that bothered Plosser: “The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October.”
Some obvious face-saving on the Committee’s part, but Plosser “believed that the statement should not stress the importance of the passage of time as a key element of its forward guidance and, given the improvement in economic conditions, should not emphasize the consistency of the current forward guidance with previous statements.”
In other words, “Don’t use the word ‘considerable’ in a sentence again. Ever.”
Plosser’s concerns have proven unfounded. Stuck though it was, in the middle of a tedious, overwrought paragraph, “patient” has proven strong enough to save the day.
Now we’ll see what happens to the rest of the year.