forward guidance tied to outcomes is ‘very effective’ By Reuters

Japan government to include $302 billion in spending under second

(Reuters) – San Francisco Federal Reserve Bank President Mary Daly on Monday said she would prefer to tie any forward guidance on the path of interest rates from the U.S. central bank to specific economic outcomes rather than to a specific date.

The Fed used both types of forward guidance after the last recession, and Daly told the National Press Club in a webcast event that past promises to keep rates low until the economy hits a particular economic threshold – for instance, a specific unemployment rate – were “very effective.”

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