Central bankers who have spent a generation researching how their words influence the economy and honing the craft of 'forward guidance' are now effectively tongue-tied by a health crisis that has no clear destination yet to guide households and investors toward.
WASHINGTON/TOKYO - Central bankers who have spent a generation researching how their words influence the economy and honing the craft of “forward guidance” are now effectively tongue-tied by a health crisis that has no clear destination yet to guide households and investors toward.
Analysts feel that shift by the Fed may begin as soon as its meeting next month, though officials for now say the outlook is too uncertain to allow or require precise plans. Other major central banks have been similarly generic in recent communications, offering some version of the now-familiar promise to “do whatever it takes” to get through the crisis.
Even the European Central Bank, where the accretion of new programs over recent years has built perhaps the most elaborate policy structure among major central banks and the lengthy guidance to go with it, has had to hedge about what to expect.
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