However, it is not yet clear how high we will need to raise the federal funds rate and how much time will pass before we begin to see inflation moving back down in a consistent and lasting way. My general point is that inflation is much too high, and the outlook for inflation remains significantly uncertain.
This uncertainty makes it very challenging to provide precise guidance on the path for the federal funds rate. With this in mind, I will turn to the main topic I'd like to discuss today, which is the potential role that explicit forward guidance can play as a monetary policy tool.