Bernanke May Press Conference: 6.5% Unemployment a "Threshold, Not a Trigger" For Rates

Last December, the Federal Reserve released a statement in which it said that its zero interest rate policy (ZIRP) concerning the Federal Funds rate would be remain until at the very least unemployment remains above 6.5%. Though many thought this would prompt the Fed to automatically raise rates, Bernanke reminded the media and the public during his last press conference in May that the 6.5% figure is a "threshold, not a trigger." He said the Fed would reevaluate its ZIRP policy and take into consideration factors such as inflation and whether or not the unemployment rate accurately reflects the labor picture. 

The (U-3) unemployment rate for August was 7.3%


Of course, for that accurate picture of the labor market, Bernanke may want to look at the U-6 unemployment rate, which unlike the U-3 rate, takes into consideration those individuals who are unemployed but who have stopped looking for work, and those who have part-time jobs but are seeking full-time work. The U-6 for August was 14.6%, and increase from 14.3% in July. 

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