In August 2011, the Committee introduced a specific date into its guidance, stating that conditions would likely warrant keeping the federal funds rate target near zero at least through mid-2013.6 This date-based guidance was more precise than the qualitative language the Committee had been using, and it appears to have been effective in communicating the FOMC’s commitment to a highly accommodative policy.
In particular, following the introduction of dates into the FOMC statement, interest rates and survey measures of policy expectations moved in ways broadly consistent with the guidance.7 Although the date-based forward guidance appears to have affected the public’s expectations as desired, it did not explain how future policy would be affected by changes in the economic outlook – an important limitation.