Hammack: explaining Fed moves is accountability via transparency
Cleveland Fed CEO says setting out the reaction function is not the same as forward guidance
Explaining the US Federal Reserve’s reaction function provides “accountability through transparency”, Beth Hammack has said.
The president and CEO of the Federal Reserve Bank of Cleveland told attendees of the National Association of Business Economics in Cleveland, Ohio on October 12 that in her view, the complexity of making monetary policy decisions was a reason for Fed policy-makers to talk more, not less.
“When markets don’t understand the reaction function, asset prices can lurch sharply as
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