Federal Reserve Chairwoman Janet Yellen used her testimony to Congress on Tuesday to prepare the market for the drop of the word "patient" from the forward guidance in central bank's policy statement. Yellen stressed that markets should not assume that dropping the word would mean a rate hike was coming in two meetings. Instead, Fed officials want the flexibility so that they could hike rates on a meeting-by-meeting basis, Yellen said. She said that, provided labor markets continue to improve, Fed officials think they will hike interest rates when they are "reasonably confident" that low inflation is moving back toward the Fed's 2% annual target.
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