"He repeats that rates will remain at "extraordinarily low" levels thru mid 2013. I haven't heard anyone ask if he is excluding ANY rise in rates before then. Even 1% would be extra…low. I don't think he HAS excluded any moves before then. How could he? Anything could happen to change the facts on the ground over the next 20 months…

"Thoughts??"

David Fuller's view You make a valid point in saying that anything could happen. And he could always change his stance in the event of stronger GDP growth and higher inflation. Meanwhile, I think he has at least four primary reasons for repeating that rates could be on hold through mid-2013:

1. He wants to avoid deflation
2. He wants to keep mortgage rates low, not least because of ongoing ARM resets
3. He wants to help banks recapitalise their balance sheets via the yield curve
4. He wants to boost the stock market as an indicator of confidence

The tradeoff is that he is penalising savers and risking a serious outbreak of commodity-led inflation as the global economy picks up. Also, while banks are able to leverage up yield curve plays with almost no risk, they are less likely to lend to promising businesses which might actually be able to use some cash productively.