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Fed to rely less on forward guidance, chairman details internal task forces to revisit data and tools
Summary
The chairman said the committee has pulled back from forward guidance to obtain a more "unfiltered" market signal and has set up task forces to reassess data sources and policy instruments; he said task-force outputs will inform, but not determine, FOMC decisions.
The chairman said the committee has moved away from relying on rolling forward guidance in order to allow market prices to provide a more direct signal to policymakers.
"We're trying not to interfere with that market signal," he said, and described a data project and task forces charged with revisiting both private and public data the Fed uses. He said he appointed 15 subject-matter experts across five committees to examine the key questions and that the Fed will be the consumer and decision maker of those outputs: "The judgments we're making will be informed by, but not at all determined by these outside groups."
He also said he would check back with the task forces in the coming weeks and that some of their work may inform his remarks at the Jackson Hole symposium.
Provenance: topicintro SEG 263, topfinish SEG 475.
