Reminder: US Markets Live special edition, Bernanke presser We're starting at 2:10pm EST (7:10pm in London) at the usual place. We were puzzled a few weeks ago as to why Charles Evans had changed his eponymous rule from 7/3 to 6.5/2.5. Turns out he might have just been aligning himself with what was coming. Today the FOMC abandoned using a calendar date (most recently mid-2015) as its approximate guide to when it would begin raising rates. Instead: Though it's also important to note that the FOMC is retaining a certain amount of wiggle room regarding these "thresholds," especially around inflation: That flexibility is important because the Fed is using "projected" inflation rather than an actual measure as its threshold, which presents the philosophical problem that Robin Harding described in an excellent post on Monday - to rigidly use an inflation forecast above the Fed's target essentially would mean the Fed having to admit that it will miss its own inflation goal (of 2 per cent): The philosophical problem is whether it could ever make sense for a central bank to forecast inflation much above 2 per cent two years in the future - basically a forecast that it intends to miss its inflation goal. In that light, the proposal by Mr Evans is a little odd. If the Fed were forecasting inflation of 2.5 per cent three years in the future it has a serious problem so this isn't much of a safeguard. It makes a bit more sense in terms of implementing that optimal policy path, which would mean that the forecast today of inflation in two years is 2.25 per cent, but at the very least it poses a big communications challenge. The practical problem is which inflation forecast to use. The current FOMC forecasts are ill-designed for the purpose because of the "appropriate policy" assumption. FOMC officials have to forecast inflation using their own assumption of what policy should be - rather than what they think it will be - so their inflation forecasts always end up close to 2 per cent. A quick look at the forecasts over the last three years show that, if you use this as your threshold condition, the number would have to be much closer to 2 than 2.5 per cent. So the Fed is leaving itself some room to use other related inflation and employment variables in addition to the jobless rate and forecasted headline PCE - making projected inflation more a guide than a hard trigger. But this also probably means that the potency of the measure, though stronger than that of using a calendar date, remains somewhat diluted. Which leaves room for further changes later on or, at least, will make for a fascinating presser this afternoon.