Bloomberg Surveillance · Friday, July 31, 2026
A former Federal Reserve official argues that the Fed may have boxed itself in with too much reliance on forward guidance, suggesting a need for greater transparency regarding its inflation targets. He emphasizes that an inflation-targeting central bank must be clear about its objectives, even as they may evolve.
“You know, there's two things I've changed my mind about in the last five years. One is drug legalization and the other is monetary policy transparency, which I was like a big thing of. You know, Actually Rich was chair of the department when I was at Columbia, so I learned all this stuff from him, and it's just I feel like the FED sort of started to box itself in a little bit too much a forward guidance.”
“But I think Anna as usual raised is an important point is that an inflation targeting central bank needs to be clear about what it is it's targeting. It can, it may evolve, and so I think that will be important very importantly.”