Unemployment false signals and monetary policy

What are the drivers of monetary policy?

Forget about forward guidance. The real focus of traders is knowing what the Fed looks at in the economic data. You can then forecast the underlying economic data and anticipate what will happen with the next Fed move. There has been a lot of focus on unemployment, yet that variable seems to have become a false signal. There is not a 7% unemployment signal to suggest that there will be tapering by the Fed. Or, it does not seem like this will be the best signal for the market to follow.

Vice Chairman Yellen suggests that the labor market is more complex and suggest a more nuanced approach looking at a number of variables. For example, unemployment is declining because labor force participation is falling. The unemployment number is a false signal. Unfortunately, it is not clear how much weight the Fed places on these alternative labor signals.

So we listen to the forward guidance because the Fed will not give us the real guidance which are the variables or triggers used to suggest a policy change. It could be that they are not sure of the signals themselves.