I will argue here that the science of monetary policy suggests that the Federal Reserve can indeed go further in enhancing its communication strategy, and that doing so would produce important benefits in economic performance and democratic accountability. I will also outline a specific proposal of my own and address a few concerns that some might have with elements of this proposal.
Moreover, the prolonged presence of uncertainties, related to geopolitical factors, the rising threat of protectionism, and vulnerabilities in emerging markets, is dampening economic sentiment, notably in the manufacturing sector. In this environment, inflationary pressures remain muted and indicators of inflation expectations have declined.