Two words will frame the Federal Reserve's path ahead: "data dependent." If history holds, though, the phrase is more campaign slogan than reliable policy standard.
Almost since it began its ultra-easy policy in late-2008, the Fed has stressed the importance of tying economic metrics to policy moves. When it came to decision time, however, the U.S. central bank's Open Market Committee has consistently moved the goalposts when any data point came close to meeting its prescribed targets.
Unemployment, for instance, has long since dropped below the original stated 6.5 percent threshold that would trigger a rate hike. Gross domestic product, which is the broadest measure of economic growth, has had just three negative quarters total since the recession ended in mid-2009, and each of those came in the first quarter—2011, 2014 and 2015. The first two were followed by growth of 2.9 percent and 4.6 percent, respectively, and the second quarter of 2015 is tracking at 2.1 percent, according to the Atlanta Fed.
The only data point on which the Fed has been able to reliably hang its money-printing zero-interest rate hat on has been inflation. According to the government gauges the central bank follows, inflation has been held in check despite surges in food prices and other day-to-day expenses.