Cleveland Fed’s Mester sees guidance as 'comms device'
Mester: forward guidance should be used for laying out Fed’s reaction function
The Federal Reserve should use forward guidance "more as a communications device" than as a policy tool in more normal times, Loretta Mester told an audience at the Banque de France today.
The Federal Reserve Bank of Cleveland president would like to see forward guidance used to "articulate the considerations the [Federal Open Market Committee] would take into account when determining future changes in policy".
Moreover, she said, it should be used to convey information that helps the public
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