"We've been patient in removing accommodation, and I think that patience has served us well," he said.
J.B.: The chairman is right to emphasize the difference between removing accommodation versus actual tightening of policy.
Those officials "noted examples of past instances in which policy makers had prematurely removed accommodation, with adverse effects on economic growth, employment and price stability," it said.
When the Fed eventually removes accommodation, rates will rise, markets will fall, economic growth will suffer, and the world will not end.
"It is always an issue … that in the recovery period you have to pick the right moment to begin removing accommodation and taking away the punch bowl," Bernanke said, referring to the famous central bank line about the difficulty of raising interest rates when the economy gathers steam because no one wants to stop the party.
"We have spent considerable effort in developing the tools we will need to remove policy accommodation, and we are fully confident that at the appropriate time we will be able to do so effectively".
When the committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.
"We expect to see solid job growth continue, but we do need, if things continue on their current course, to gradually remove the accommodation that is there," she said.
Past experience with the zero lower bound, Charlie argued, also counsels patience as history has not looked kindly on attempts to prematurely remove monetary accommodation from economies: "The costs of being mired in the zero lower bound are simply very large".
Remove surplus accommodation.
