The Federal Reserve Loses Its Patience

There has been a slight tweak in the Federal Reserve’s wording about interest rates.

Federal Reserve Board Chairwoman Janet Yellen.

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The Federal Reserve said today in its policy statement it would no longer be "patient" before deciding to raise the short-term interest rate it controls; it will instead wait be "reasonably confident" that inflation will hit its 2% target.

Since December, 2008, the Fed has kept the interest rate it controls, the federal funds rate, near zero in an effort to boost the economy. With unemployment at 5.5% and the national economy creating jobs at a steady clip, some observers and Fed officials say that the central bank should consider hiking rates at its June meeting.

In the past, the Fed had said in its policy statements that it would be "patient" before a rate rise. While the Fed has another policy meeting in April, it ruled out raising rates then, calling it "unlikely." Many analysts and economists expect rates to finally be raised after the Fed's June meeting.

"This change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range," the Fed said.

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