The FOMC could then articulate whether and why it anticipates policy to be somewhat more restrained or more accommodative, relative to the projections given by the rules. The current monetary policy report that the Fed delivers each February and July could be adapted to include those exercises as well as a discussion of the opinions of Committee members regarding the results.
It is important that in performing this exercise we illustrate the various dimensions of uncertainty that policymakers face. For example, there is model uncertainty, forecast uncertainty, and the variations implied by different rules. Many central banks use fan charts and other devices to highlight such uncertainty, and we, the Fed, would be wise to do the same.