Monetary policy works with long and variable lags, so rate increases need to begin well before we reach those goals. Let us turn to the two main economic conditions for liftoff that the Committee articulated. We have already seen a great deal of progress in the labor market, and I expect that progress to continue.
Despite slowing in March, job creation has been particularly strong over the past two years. The unemployment rate has declined from 10 percent in October 2009 to 5.5 percent in March 2015, a level that is not far above many estimates of its natural rate. But the unemployment rate probably understates the amount of slack still remaining in the labor market.