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So we're all agreed: The "patient" dies this week.

Markets would be shocked if the U.S. Federal Reserve doesn't euthanize the p-word in its statement on Wednesday when it describes how ready it is to leave interest rates at historic lows.

That likely demise of "patient" raises an important question: How quickly will the new, much less patient Fed move when it comes to actually raising rates?

Many people believe the first rate hike could come as early as June. The rationale is that a recovering U.S. economy could spur inflation unless it is given a splash of higher rates to cool off its exuberance.

But that danger seems highly theoretical right now – and the more closely you examine the data, the less likely an early rate rise appears.

For all the gnashing of teeth about possible inflation, the consumer price index in the United States is actually falling at the moment, largely because of tumbling costs for gas and fuel oil. Even stripped of its volatile energy and food components, the CPI is only edging ahead by 1.6 per cent a year.

Given the lack of any clear and present danger from inflation, those who support higher rates must point to so-called Taylor rules, which indicate how the central bank is supposed to adjust interest rates given current levels of output and inflation.

The problem is that Taylor rules come in many flavours. John Taylor, the Stanford University economist who devised the rule, proposed one version in 1993 and another in 1999. Many other economists have come up with their own variants.

Most versions of the Taylor rule suggest that the federal funds rate, now at 0.25 per cent, should already be close to 3 per cent, meaning the Fed is way behind and will have to boost rates quickly to catch up. But financial markets are pricing in a slower, more gradual rise in rates.

That outlook is sensible, because anyone who bumps up against the real world tends to wind up thinking that there is far more slack in the economy than the headline figures indicate. Gavyn Davies, chairman of Fulcrum Asset Management, writes in the Financial Times that simply plugging a wider definition of unemployment into the Taylor rule results in the conclusion that there is little, if any reason, to raise rates.

There is also another excellent reason to take future rate hikes gradually. The U.S. dollar is surging as investors rush to grab a piece of the U.S. recovery and position themselves ahead of the higher rates that are expected soon. But the pricey greenback is likely to be a challenge for U.S. exporters, who now must compete against a wave of cheap foreign competition.

Given all that, does it make sense to boost rates this summer and drive the U.S. dollar even higher? Maybe not. The conventional wisdom holds that the United States is the bright spot in a murky global economy. That's true to a degree, but it's important not to overstate the vigour of this recovery.

While most human forecasters believe the U.S. economy will expand around 3 per cent in 2015, the GDPNow model devised by the Federal Reserve Bank of Atlanta to provide an early reading on growth has been considerably less bullish. It estimates the U.S. economy is crawling ahead in the first quarter at an annual pace of only 0.6 per cent.

The Citi Economic Surprise Index, which measures how economic data measure up to expectations, has also been showing a pattern of misses – not enough to signal real problems ahead, but enough to undermine hopes that growth is likely to burst ahead quite as fast as many people had hoped.

So say goodbye to the word "patient." But be prepared to be exactly that as the Fed begins what is likely to be a very slow, very tentative increase in rates.

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