Federal Reserve Pledges To Keep Interest Rates Low Until Unemployment Hits 6.5 Percent

In its latest statement, the Federal Reserve pledged to keep interest rates low until unemployment hits 6.5 percent (or inflation clears 2.5 percent). For some time, members of the Federal Reserve Board — most prominently Chicago Federal Reserve President Charles Evans — have called for the central bank to set an explicit unemployment target. Previously, the Fed only gave a date for the end of its actions, not an economic indicator. As Washington Post economic reporter Neil Irwin put it, “The Evans Rule is now the rule of the monetary land.”