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Podcasts Take Two
Fed uses 'Evan's Rule' to tie interest rates to unemployment, inflation
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Dec 13, 2012
Listen • 6:55
Fed uses 'Evan's Rule' to tie interest rates to unemployment, inflation
Yesterday the Federal Reserve announced it will now tie interest rates to the unemployment rate. Under something called the "Evans Rule," interest rates will remain as they are until unemployment goes below 6.
Federal Reserve policymakers are divided over when to end extraordinary measures intended to encourage more borrowing and spending to help stimulate the U.S. economy, according to minutes of the Fed's last meeting released Wednesday. (Chairman of the Federal Reserve Ben Bernake speaks during a news briefing at the Federal Reserve 11, 2012 in Washington, DC.)
Chairman of the Federal Reserve Ben Bernake speaks during a press briefing at the Federal Reserve 11, 2012 in Washington, DC. Bernake spoke to the press after meeting with the Federal Reserve's Federal Open Market Committee.
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BRENDAN SMIALOWSKI/AFP/Getty Images
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Yesterday the Federal Reserve announced it will now tie interest rates to the unemployment rate. Under something called the "Evans Rule," interest rates will remain as they are until unemployment goes below 6.

Yesterday the Federal Reserve announced it will now tie interest rates to the unemployment rate. Under something called the "Evans Rule," interest rates will remain as they are until unemployment goes below 6.5 percent and if inflation is projected to be no more than 2.5 percent. 

Here to help us understand more is Paddy Hirsch, the Senior Producer of Personal Finance at Marketplace.