User:Henk van Tijen/Forward guidance

This is not a Wikipedia article: It is an individual user's work-in-progress page, and may be incomplete and/or unreliable. For guidance on developing this draft, see Wikipedia:So you made a userspace draft.

Find sources: Google (books · news · scholar · free images · WP refs) · FENS · JSTOR · TWL
Easy tools: Citation bot (help) | Advanced: Fix bare URLs
This page was last edited by Cydebot (talk | contribs) 5 years ago. (Update timer)

Finished writing a draft article? Are you ready to request an experienced editor review it for possible inclusion in Wikipedia? Submit your draft for review!

Forward Guidance

The Bank of England issued the term “forward guidance” on August 7, 2013 when it said 'it would consider raising its short-term interest rate when the unemployment rate fell to 7 percent or below'.

Forward guidance is a promise about future (monetary) policy actions. The central bank is saying: “If this happens, we will consider doing this.”

It’s designed to give households, businesses and investors a clearer view on when interest levels might go up and thus enables them to better plan investments.

The strategy is also used by Bank of Canada,, the U.S. Federal Reserve and European Central Bank.

Critsism

If forward guidance is too conditional, investors still have little certainty about developments in the interest rates.

References

External links

[1]