Daily Archives: August 9, 2013

With interest rates floored near the nominal zero bound and with balance sheets having already expanded significantly, central bankers are placing greater emphasis on forward guidance to influence private sector expectations and behaviours.

By credibly committing to a transparent path, central bankers hope to avoid the instability that often accompanies changes to monetary policy. In the meantime, they would continue to support activity and markets, thereby providing more time for their economies to heal and for other policy making entities to get their act together. Continue reading »