The SBA and the Fed- Part II

How long is an "extended period"?

From Calculated Risk http://www.calculatedriskblog.com/

Short answer: Longer than many analysts expect.

First we can compare to the "considerable period" language in 2003:

June 25, 2003: Lowered Rate to 1%, Unemployment Rate peaked at 6.3%

August 12, 2003: “the Committee believes that policy accommodation can be maintained for a considerable period.” Unemployment rate at 6.1%

December 9, 2003: Last statement using the phrase "considerable period". Unemployment rate at 5.7%

January 28, 2004: the Committee believes that it can be patient in removing its policy accommodation. Unemployment Rate 5.7%

May 4, 2004: “the Committee believes that policy accommodation can be removed at a pace that is likely to be measured.” Unemployment Rate 5.6%

June 30, 2004: FOMC raised the Fed Funds rate 25 bps. Unemployment Rate 5.6%

So "extended period" is probably 6+ months after the language changes - the next meeting is June 23rd and 24th, so the earliest rate hike would probably be in December (barring a significant pickup in inflation or rapid decline in unemployment).