BIS economists give forward guidance mixed review

Communication tool has achieved aims but poses financial stability risks


Forward guidance has helped shape market expectations across the globe, according to researchers at the Bank for International Settlements (BIS), but could pose financial stability risks.

The four major developed world central banks – the European Central Bank, Bank of Japan, Bank of England and the Federal Reserve – have all offered guidance on the future path of their policy rates in the past year.

This guidance has had an "immediate" impact on the level of expected future interest rates

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