Should the Fed Do Better in Communicating?

The video discusses the shift from calendar-based to data-driven guidance by the Federal Reserve (Fed). It emphasizes the need for the Fed to communicate more clearly about their data-dependent strategies, particularly regarding inflation expectations and interest rates. The speaker highlights the importance of understanding both consumer and market expectations of inflation, noting discrepancies between survey-based and market-based measures. The Fed's challenge is to convince the public and markets that inflation will rise to the desired 2% level.

What is the significance of data-driven guidance in the context of the Federal Reserve's communication?

What are the implications of low inflation expectations on the Federal Reserve's interest rate decisions?

How should the Federal Reserve communicate its stance on inflation expectations according to the speaker?

Discuss the differences between consumer expectations and Wall Street's expectations regarding inflation.

What challenges does the Federal Reserve face in convincing the public about inflation rising to the 2% level?