For Federal Reserve critics, lobbing the "behind the curve" charge has become the easiest to way to blast the central bank's ultra-easy monetary policy.
Inside the Fed, though, the charge has become something just short of a badge of honor, an indication that officials there are willing to tolerate being slow to move on interest rates as long as it boosts workers' economic conditions.
The "curve" charge itself has a sharp implication, namely that Chair Janet Yellen and her cohorts are ignoring mounting inflation pressures and ultimately will have their hand forced by an economy growing more rapidly than they give it credit. Moreover, the implication goes straight to the Fed's competence and whether it really is a capable steward or an overzealous money printer too willing to prop up bubbles.
Nonsense, said Pimco's Paul McCulley, who serves as the bond giant's chief economist and, suddenly, as a vocal defender of the central bank's policies.
In a report issued for clients earlier in the week, McCulley said "behind the curve" is exactly where the Fed wants to be—for now. The goal is to keep interest rates low not until unemployment falls below 6 percent or inflation eclipses 2 percent—the previously stated goals from the Open Market Committee for when it would begin to consider raising rates—but until consumer buying power gets considerably stronger.