Forward guidance
Forward guidance is the practice by which a central bank indicates in advance the likely direction of its policy. In December 2008, the FOMC thus promised that rates would stay “exceptionally low” for some time: the practice became a habit at the Fed. Kevin Warsh, Fed chair since May 22, 2026, broke with it: starting in June, the passage disappeared from statements, and on September 16 he said he was not “in the forward guidance business.” Without that guidance, the market has to read inflation and employment numbers itself to anticipate the next decision — hence sharper reactions to releases. Explanations: the guide to economic releases.
See also
The 12-member committee that sets the US policy rate, 8 times a year.
The set of levers a central bank uses to steer inflation and employment.
The two monetary policy stances: restrictive (hawkish) or accommodative (dovish).
The rate at which a central bank lends to commercial banks — the “rent on money.”