Skip to main content

Fed adopts new thresholds and expands QE3

The Fed's adoption of numerical thresholds is, in practical terms, just a tweak in the framework used to signal how long it expects to leave short-term rates at near-zero. Based on the FOMC's new economic projections, the unemployment rate isn't expected to reach 6.5% until roughly mid-2015 anyway so, as noted in the statement, the new thresholds are "consistent with its earlier date-based guidance". The upshot is that, once the dust settles, the reaction in short-term Treasury yields should be muted.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services


Get access