Forward Guidance and Monetary Policy Communications: Use Your Words and Connect the Dots

Abstract: In the brief time allotted for my prepared remarks, I will discuss forward guidance. My basic point will be that the effectiveness of forward guidance as a policy tool in extraordinary times can be enhanced by improving monetary policy communications in normal times. Two phrases you often hear in real life are “use your words” and “connect the dots.” In my view, both should be applied to the FOMC’s monetary policy communications.

Keywords: Forward guidance; Monetary policy communication;

Access Documents


Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Speech

Publication Date: 2024-05-28