It's an adage that discretion is the better part of valor, and sometimes prudent discretion means doing nothing at all.

That, for all intents and purposes, is what the U.S. Federal Reserve believes is the best operational stance currently -- namely, doing nothing at all.

In other words, it's a status-quo monetary policy in which the Fed will need to see numerous data points on either side of the inflation / economic growth equation before its considers raising or lowering short-term interest rates.

In its most recent meeting this May, the Fed kept short-term interests at 5.25%, while simultaneously giving apparent equal weight to its dual concerns of controlling inflation and maintaining adequate U.S. GDP growth.

Regarding economic growth, in its statement the Fed acknowledged that U.S. economic growth has slowed in the first part of the year, with the sluggish housing sector contributing to the slowing, but also hypothesized that the U.S. economy seems likely to expand at a moderate pace in the quarters ahead.

Regarding inflation, in its statement the Fed also sent a clear signal that while the Fed is aware and concerned about the U.S.'s slow growth in Q1, it remains concerned about elevated inflation. The Fed concluded that core inflation is "somewhat elevated" and that although inflation pressures seem likely to moderate over time, high resource utilization had the potential to sustain those pressures.

Further, the Fed added that "in these circumstances, the [Fed] Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected."

Fly Analysis: In a increasingly-complex macroeconomic environment -- one in which the global economy has added new potential sources of inflation -- the Fed's status-quo decision represents the correct, current monetary policy. Monetary doves will argue that the below-trend U.S. GDP growth in Q1 should have prompted the Fed to lower rates, but that is a selective read of economic data points. Inflation, fanned by elevated oil prices, remains above the Fed's comfort zone.

In sum, there's a very real chance that inflation would accelerate in the quarters ahead or a very real chance the U.S. economy could slow to stall-level in the quarters ahead: future data points on either side could tip monetary policy either way. And as of May, there weren't enough data points on either side of the ledger to decide the issue. Hence, the Fed's status-quo May decision represents the correct one, pending new data on inflation and economic growth.