“Jettisoning forward guidance is a good thing. The less you commit to, the fewer U-turns you make, and the more credibility you store up. Central banks globally have defied their own guidance repeatedly since the concept became popular under former Fed head Ben Bernanke many years ago. The intent was to earn plaudits for transparency. Instead it earned mockery for the endless mind changing and, in one infamous exchange with politicians, the moniker ‘unreliable boyfriend’ for former Bank of England chief Mark Carney. [Emphasis added, with much enthusiasm.]
Amen! It turns out that, since it’s impossible to accurately predict the future, it makes absolutely no sense to try. This advice of course applies doubly to company managements, by the way.
Central bankers should just keep quiet
By Thomas K. Brown,
STAY MUM: The analysts at Fisher Investments have some very good advice for central banks. Stop blabbing about your policy intentions ahead of time:
“Jettisoning forward guidance is a good thing. The less you commit to, the fewer U-turns you make, and the more credibility you store up. Central banks globally have defied their own guidance repeatedly since the concept became popular under former Fed head Ben Bernanke many years ago. The intent was to earn plaudits for transparency. Instead it earned mockery for the endless mind changing and, in one infamous exchange with politicians, the moniker ‘unreliable boyfriend’ for former Bank of England chief Mark Carney. [Emphasis added, with much enthusiasm.]
Amen! It turns out that, since it’s impossible to accurately predict the future, it makes absolutely no sense to try. This advice of course applies doubly to company managements, by the way.