Investors do not have the structural protections they have relied on for many decades. As a result, many have been victims of classic cases of fraud and abuse—some appropriately classified as “Ponzi schemes” under a high-tech veneer.
Forward guidance is not an unconditional commitment about what we are going to do. That’s not something we would be able to do and we wouldn’t be credible, as we necessarily react to new information flows we receive. It does, however, provide clarity about how our monetary policy incorporates these information flows.