BIS central bankers’ speeches  tightly linked, an adverse reaction in European financial markets could affect U.S. financial markets, and, through them, real activity in the United States. In addition, we should not dismiss the possible reemergence of risks surrounding China and emerging market economies (EMEs) more broadly.
This shows that it is not easy for emerging economies that are experiencing rapid aging, to credibly convince markets of a scenario that temporarily requires a large fiscal stimulus while promising to maintain fiscal sustainability in the long-term. An alternative conventional forward guidance So, if unconventional forward guidance is not desirable, then what are the alternatives? One option could be scenarios-based conventional forward guidance.