Fed's Waller: Forward Guidance Can Impair Policy Transmission if Too Strong or Rigid

Dow Jones07-06 23:11

1111 ET - Federal Reserve governor Christopher Waller says that forward guidance could be a useful tool for the central bank, but could also impair policy transmission if the guidance is too strong or rigid. "Forward guidance is also problematic when there are potentially different economic scenarios confronting policymakers, each with a significant probability of occurring and requiring different policy paths," Waller says at a conference in Rome, Italy. "One cannot simply take a weighted average of these scenarios as the 'base case' and use it to give forward guidance," according to published text of his remarks. Waller says restrictive guidance tied the hands of the FOMC in 2021 and unnecessarily delayed rate increases. (jessica.coacci@wsj.com)

(END) Dow Jones Newswires

July 06, 2026 11:11 ET (15:11 GMT)

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Waller says restrictive guidance tied the hands of the FOMC in 2021 and unnecessarily delayed rate increases. 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Waller says restrictive guidance tied the hands of the FOMC in 2021 and unnecessarily delayed rate increases. 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Waller says restrictive guidance tied the hands of the FOMC in 2021 and unnecessarily delayed rate increases. 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