BIS central bankers’ speeches  3  unemployment is around 5 to 6 percent – well below the current unemployment rate of 9.1 percent. Since December 2008, the FOMC has been providing conditional forward guidance about the likely path of the target federal funds rate.
From March 2009 through June 2011, the Committee’s forward guidance indicated that exceptionally low levels of the federal funds rate were likely to be warranted “for an extended period.” In August, we decided to be more specific about the timing, and our two most recent meeting statements have indicated that “economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”3 Forward guidance can provide monetary accommodation by leading investors to expect a longer period of low interest rates.