Federal Reserve Chairman Walsh: Foreground guidance is effective in times of crisis, and economic stability needs to be revisited

On 30 July, at a press conference, Federal Reserve Chairman Walsh stated that it might be prudent for the Federal Reserve to provide more forward-looking guidance on monetary policy in special times such as the financial crisis (for example, between 2008 and 2009); but that such policy instruments were worth revisiting during a more stable economic environment. He added: “However, market participants, as well as journalists, have learned to fully excavate and interpret all this information. Therefore, I believe that reducing reliance on forward guidance requires a transition process.” Walsh also indicated that central bank officials naturally tended to tighten monetary policy when they saw a stable job market accompanied by rising potential inflationary pressures。