File - The U.S. Federal Reserve building, Aug. 9, 2011. AFP/Karen Bleier
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Both the Fed and BoE had promised to hold interest rates near zero until their jobless rates had fallen to a particular level. However, unemployment in the United States and Britain fell much more quickly than economists expected and both central banks scrambled to replace their suddenly outdated "forward guidance". Yellen, who was vice chair of the U.S. central bank before taking the Fed's reins, is leading the charge away from specific policy forecasts.The Fed's reputation took a hit last spring when borrowing costs shot up after then Fed Chairman Ben Bernanke talked about the prospect of the central bank reducing its stimulative asset purchases "in coming meetings".The latest guidance from the Fed and BoE is far less specific.After Yellen's first policy-setting meeting as Fed chair in March, the U.S. central bank said rates would likely stay at rock bottom for a "considerable time" after it shelves its bond-buying program and, in a twist on qualitative guidance that leaves the Fed flexibility, it predicted rates would stay below-normal even after the economy has fully healed.Yet Yellen sent markets tumbling when she stepped out of the Fed meeting that day and told reporters rates could rise "around six months" after a bond-buying program ends.
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