The Fed is feeling boxed in by forward guidance looking for unemployment below 6.5% and won’t want to make the same mistake twice. Fisher spoke with reporters after his speech and said it’s ‘hard ‘ to provide quantitative guidance and that current benchmarks need to be adjusted. He said his “guess” is that guidance will be more qualitative.
I think that’s a mistake, the Fed may have been wrong to target 6.5% unemployment but it provides more certainty than vague words about rates.
