The key sentence in Janet Yellen's written testimony before the Senate this morning is here: "The FOMC's assessment that it can be patient in beginning to normalize policy means that the Committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings."
When will they raise rates? Providing the job market keeps improving, only when the Fed is "reasonably confident that inflation will move back over the medium term toward our 2 percent objective."
But Yellen has used this "next couple meetings" line before. In December, when the Fed changed its line that it would keep rates low for a "considerable time" to simply assuring everyone they would be "patient" as to when rates might rise, Yellen made a point of saying that this did not represent a change in policy, and then said, "In particular, the committee considers it unlikely to begin the normalization process for at least the next couple of meetings."
That was December. At that time, everyone said that meant no hike at the January or March meeting, but there could be in April.
Now there is no rate hike in March or April, but there could be one in June.
Say what you will about the Fed being behind the curve, Yellen has mastered the art of managing expectations. Her goal seems to be to be: go slow, very slow, and no surprises.
She has come a long way from her debut in March of last year, when at her first press conference, she said the Fed would start raising short-term rates about six months after they end their stimulus program.
You're not hearing those kinds of time-specific comments any more.
The Fed is not just agonizing over whether they should raise rates; they are agonizing over when they should remove the word "patient."
Art Cashin noted that Yellen has hewed careful to the Hippocratic Oath: first, do no harm. He is referring to doing no harm to markets.
If that is indeed her goal, she is accomplishing that.