Yellen is probably unlikely to push for interest-rate hikes, at least as long as the job market lags. And in February, she signaled in a speech that even after unemployment dips to 6.5 percent and the Fed ends its bond-buying, the central bank could well keep short-term interest rates near zero for some time. Those rates have been in effect since 2008.
But in public statements, the Fed's interest-rate-setting committee has also said that the continued low-interest policy depends on inflation forecasts not exceeding 2.5 percent in one to two years.
These targets are “thresholds for possible action, not triggers that will necessarily prompt an immediate increase” in rates, Yellen said in her speech. “When one of these thresholds is crossed, action is possible but not assured.”
