The value of publishing central bank interest rate
Feds are looking to be more transparent about their policies. What is your view on the Feds publishing it's interest rate projections and policies?
One of the proponent of this policy is the chairman of San Fran. central bank. You can read his paper here:- http://www.frbsf.org/publications/economics/paper…
Cliffs-
Cons:
Feds are unable to project interest rate because it'd be impossible for them to agree on long-term projection.
The market would take the Feds projection as the law and definite!
Pros:
It can better align the market and Feds out look on interest rate, reducing uncertainty and thereby providing macroeconomic benefits
People really wouldn't take central bank's projections as the law because other central banks (Norges and RNBZ) have gone this route without facing this problem.
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