Forward Guidance and Communications in U.S. Monetary Policy

Good evening and thank you very much for the invitation to speak in the Imperial Business Insights Series. I have learned that this successful series is now in its third year and it has brought speakers to the podium to discuss a wide range of topics in the major themes of finance, innovation, and entrepreneurship. Tonight I will speak about forward guidance and monetary policy communications. I think it is clear that this topic is related to finance, but I submit that it is also related to the two other themes of your series: innovation and entrepreneurship. Since the onset of the 2008 financial crisis, policymakers have had to be quite innovative in addressing the challenges facing the global economy. They have had to be entrepreneurial in developing new economic models and monetary policy tools to help navigate the uncharted waters of the past six years. Tonight, I?ll give my views on one of those tools, forward guidance, and the role it plays as a part of the broader communications provided by monetary policymakers. Of course, my remarks will reflect my own views and not necessarily those of the Federal Reserve System or my colleagues on the Federal Open Market Committee.