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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
On forecasting future monetary policy: has forward-looking language mattered?
Simon H. Kwan
Abstract

This Economic Letter reviews the changes in the content of the FOMC statements over the past several years and examines how the accuracy of market forecasts of monetary policy has evolved. The analysis complements prior research showing that, as the FOMC took steps to foster greater transparency, the accuracy of the fed funds futures market in predicting future fed funds rates has improved. In recent years, the level of precision improved further as forward-looking language was included in the FOMC statements.


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Simon H. Kwan, "On forecasting future monetary policy: has forward-looking language mattered?" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 15, 2007.
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Keywords: Forecasting ; Monetary policy ; Federal funds rate
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