What will it take for Bernanke to raise rates? .... 3.5% GDP growth

What will it take for the Fed to raise rates?   Obviously, the increase in commodities prices has not had much of an effect thusfar as Bernanke has been blaming emerging market growth rather than Fed monetary policy.

The magic number seems to be 3.5% growth, 2.5% CPI or 7.5% unemployment.  Via Bloomberg:

“Headline inflation is beginning to have a greater influence on monetary policy, but not yet at the Fed,” said Crescenzi, who helps manage $1.2 trillion at Pimco in Newport Beach, California, as executive vice president.

The central bank “remains anchored or hinged to the core rate,” which excludes food and energy costs.

The Fed “appears to be awaiting economic growth that is stronger than 3.5 percent, a more significant decline in unemployment and rising expectations for inflation,” Bob Doll, chief equity strategist for fundamental equities in New York at BlackRock Inc., said in a Jan. 31 note. “In our opinion, we are still quite a bit away from such an environment.” 


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