Bloomberg with a good read for a Friday morning ...
Let There Be Dark: Pioneering RBNZ Joins Peers Paring Guidance
Oh, yeah re the title to this post, where I added "forward guidance, that is" ... sort of redundant, that 'forward' guidance, what other sort is there? Ah well .... its Friday ...
OK, back on topic ....
New Zealand's central bank, one of the pioneers of interest-rate guidance, is finding that like the Federal Reserve, sometimes it's better to be vague.
The bank this month sliced a year off its forecasts for 90-day bank bills, which are a guide to the outlook for the benchmark interest rate
The article goes with more from the RBNZ:
"We try to be as transparent as possible," Wheeler said this month. "We're one of the most transparent central banks in terms of putting out interest-rate projections, but our ability to forecast rates the further out we go just diminishes."
I can't fault Wheeler's honesty there.
And, from Federal Reserve Vice Chairman Stanley Fischer:
"It is likely that explicit long-term forward guidance will play less of a role in monetary policy after liftoff than it has during the past few years. As monetary policy is normalized, interest rates will sometimes have to be increased, and sometimes decreased."
What say the people of ForexLive? Happy to get less guidance from central banks, or not?
