YELLEN' S DISCRETION / THE WALL STREET JOURNAL REVIEW & OUTLOOK

REVIEW & OUTLOOK

Yellen's Discretion

Soon the Bernanke autopilot expires. Then the fun begins.

Updated Sept. 18, 2014 2:23 p.m. ET

Countless words were written Wednesday about the Federal Reserve's latest policy statement, claiming that it signals this or that or something else. We'll come right out and admit that we have no idea what it says about the future of monetary policy. We doubt even Fed Chair Janet Yellen knows.

The Fed did continue paring back its bond purchases, a process that began under former Chairman Ben Bernanke. The Open Market Committee will presumably finish that job at its meeting next month, which means the days of the Bernanke autopilot will be over. Then Ms. Yellen will have to earn her pay by deciding when and how fast to raise interest rates.

Wednesday's statement retained the Fed's language that interest rates will remain low "for a considerable time," which pleased the doves. For the first time, however, the Fed also explained in some detail how it might exit from its post-crisis monetary exertions, which suggests it really is preparing to raise rates—eventually. But then in her press conference, Ms. Yellen stressed that the exit plan "is in no way intended to signal a change in the stance of monetary policy." The Open Market Committee vote also included two hawkish dissents, from regional bank presidents Richard Fisher and Charles Plosser. Those men have often been right but never decisive in Fed councils.

Our own view is that the Fed would help the economy grow faster by reducing monetary uncertainty and returning to a normal policy regime. But we live in a world without monetary rules, so Ms. Yellen will keep everyone guessing for many months to come.