Specifically, it is stressed that interest rates could be increased once inflation is expected to be above 2.5% or inflation expectations no longer remain well anchored. In June 2013, the Fed also provided date-based guidance about the tapering of its asset purchase program, revealing its intention to cease new purchases of Treasury bonds and mortgage-backed securities by mid-2014.
The Bank of England’s forward guidance in August 2013 was on both interest rates and asset purchases at the same time. Akin to the Fed, the Bank of England provides thresholdbased guidance with a numerical target for the unemployment rate.