US forward guidance had limited effectiveness, Fed paper finds


The Federal Reserve’s forward guidance regime between 2009 and 2016 had “limited effectiveness” due to households and firms having incomplete information, a team of Fed researchers finds.

In Forward guidance with Bayesian learning and estimation, Christopher Gust, Edward Herbst and David López-Salidouse gather data on household and firm activity, as well as data on output gap, inflation and interest rates.   

They find that households and firms were slow to learn about forward guidance, only

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account