Even though the FOMC has said that it doesn’t anticipate raising rates when the economy crosses that threshold, I believe that with the economy so close to the unemployment  BIS central bankers’ speeches  3  threshold, we face a communications challenge. In particular, we have not described how policy will be conducted after the unemployment rate falls below 6.5 percent.
Forward guidance is central bankers’ speak for communication about the future course of monetary policy, and particularly about the likely path of the short-term policy rate. One reason for this increased attention on the future path of policy is that short-term rates have been constrained by the zero lower bound.