The Federal Open Market Committee should stress the uncertainty of future economic paths and describe how policy will react in possible situations, Federal Reserve Bank of Minneapolis president Narayana Kocherlakota said Wednesday.
“Too often, our communications about the future course of the economy imply considerably more certainty than we can possible have,” he told a group in Rapid City, S.D., according to a prepared text of his remarks released by the Fed.
“We should be more transparent about the uncertainties that we face as policymakers. We can and should use scenario analyses to describe how our policy will respond to new information about those uncertainties.”
