A better guide would be a "rule-like approach," he said.
Under this method, the central bank would look at a policy yardstick like the Taylor rule, which estimates what the Fed's target rate should be based on economic conditions. Yellen has signaled she opposes such a framework.
Such rules don't offer good policy prescriptions during abnormal economic times like today, Yellen said this week. When the Fed can't lower its rate any further and the economy faces "persistently strong headwinds," these rules would suggest policy makers tighten too early, she said.