The Fed, more politician than economist, largely maintains confidence by saying what people, even they, want to hear. The job market, following an economy showing signs of deterioration near extreme cycle concentrations and struggling to expand (chart), is more likely to transition unexpectedly from prosperity (growth) to liquidation (contraction) than 'liftoff' from revival (rebuilding) to prosperity as suggested below. The Fed appears not only to be blinded by opinion - highlighted by words such as "I believe.." but also a poor understanding of timing and a business cycle that to many believe is manageable, or worse, does not exist.
Headline: Fed's Williams Sees Liftoff in 2015 as Job Market ‘Nearly Healed'
John Williams, president of the Federal Reserve Bank of San Francisco, said the central bank is likely to raise interest rates this year as the economy reaches full employment, though he’s troubled by low inflation.
“I still believe this will be the year for liftoff,” Williams, a voting member of the policy-setting Federal Open Market Committee, said in a speech Friday in San Francisco. Although he’s awaiting more evidence inflation is moving up toward the Fed’s goal, “I see a safer course in starting sooner and proceeding more gradually.”