Data-Dependent

Data-dependent means decisions are based on incoming economic data rather than a fixed plan. In simple terms, data-dependent means waiting to see the numbers before deciding what to do. Data-dependent is important because central banks often use this phrase when they do not want to promise a specific future action. It tells investors that inflation, jobs, growth, and other data will guide future policy decisions. For example, if the Fed says future rate decisions are data-dependent, it means the Fed will look at upcoming reports before deciding whether to cut, hold, or raise rates. Data-dependent does not mean there is no plan. It means the plan can change depending on the evidence.