Let’s turn briefly to 2015 and the run-up to last December’s increase in the federal funds rate – also an important focus of the paper. The authors and many market participants are critical of communication around the September meeting.
With the June 2015 Summary of Economic Projections (SEP) showing that 15 of 17 FOMC participants judged that appropriate policy would entail an initial increase in the federal funds rate by the end of 2015, markets saw about a 50 percent chance that the first increase would occur in September.