Sims said:
They're not talking about raising the average rate they are talking about targeting their metrics toward the latest readings rather than readings over time.
If todays reading is 5% and the last 4 quarters were zero...they are talking about basing their decision off the 5% rather than the trailing average of 1% (napkin math)
I believe the average rate target was introduced under Bernanke.
This is probably a better way to do it.
I think of this like project management. When doing total cost estimates for projects based on current burn rate, you are going to take a while to start estimating accurately if you are using a monthly average and bring on another superintendent or assistant PM/super or more crew for general labor because you're actively burning that money, but your monthly number isn't reflecting it for another 3-4 weeks. Using the weekly payroll or a weighted average and checking it weekly will keep you more accurate and on track.
