Question

Explain what could reduce the effectiveness if the forward guidance

Answer 1

Explanation:

Forward guidance can also lower long-term interest rates by lower- ing the expected path of short-term interest rates. ... If the announced duration of low interest rates is longer than the public expects, a fall in the future path of interest rates then causes an immediate decline in longer-term rates.

Answer 2

Answer:

Effectiveness of Forward Guidance

Forward guidance can also lower long-term interest rates by lower- ing the expected path of short-term interest rates. Past policy actions suggest that when the economy slows, the Federal Reserve will lower future policy rates to

Explanation:

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