For Federal Reserve Chair Janet Yellen, monetary policy now is all about a simple rule familiar to any subway rider: Mind the gap.
In her first major speech on her policy framework as Fed chair, Yellen said U.S. central bankers must be mindful of how short the Fed is of its goals of full employment and price stability.
"The larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained," Yellen said today to the Economic Club of New York.
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