'Sufficiently Restrictive' Is the Fed's New Buzzword. What Does It Mean?
Once again, the central bank manages to confuse rather than clarify with yet another vague phrase.
The Fed has everyone confused.
Photographer: Evening Standard/Hulton Archive/Getty Images
When it comes to communicating its outlook for monetary policy, the Federal Reserve is famous for using overly vague language that can be interpreted any number of ways. The latest example came Wednesday in the central bank’s statement explaining its decision to again raise interest rates by 0.75 percentage point. And if you can decipher the meaning of this phrase, you may just be able to figure out what the Fed’s rate-setting committee will do in coming months. But don’t get too excited, because you probably can’t.
The phrase is sufficiently restrictive, and it appears in the following line in the Federal Open Market Committee’s statement Wednesday, some of the only new language in the communique: