Fed's Williams says ‘highly effective' forward guidance has a ‘number of limitations'

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John Williams, the president of the Federal Reserve Bank of San Francisco, believes the Fed's forward guidance policy has been "highly effective" at anchoring interest rate expectations, but that it also suffers from a "number of limitations".

"The introduction of explicit forward guidance fundamentally changed the behaviour of public expectations of future interest rates", Williams argues in a paper published by the Brookings Institution. However, he adds, "experience has shown that it is impos

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