With the unemployment rate falling to 6.6% in January, putting it very close to the Fed's threshold level of 6.5%, new Chair Janet Yellen could use her congressional testimony this week to signal how the FOMC's forward guidance might evolve. Fed officials have showed little appetite for lowering that threshold level or adopting an alternative indicator of labour market conditions. Accordingly, we suspect that the FOMC will simply put less emphasis on any particular value of the unemployment rate and instead rely more on its interest rate projections to anchor market expectations.
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