Communication Challenges Ahead for the FOMC

Summary

The September FOMC minutes offered a glimpse inside the decision to keep what was interpreted by markets as a “dovish” stance on unchanged forward guidance. Why did the FOMC retain the language regarding the “considerable time” between the end of QE3 and the first rate hike? According to the minutes, some participants saw it as a “risk-management” tool, suggesting that “it would be prudent to err on the side of patience while awaiting further evidence of sustained progress toward the Committee’s goals.”

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