1 For example, if the public hears that the policy rate will be lower for longer, it may interpret this news as policymakers saying that they expect the economy to be weaker for longer. If that is the interpretation of the message, then the forward guidance will not succeed and may even weaken current spending.
The point of the exercise is to show why some have worried that there might be. It would take a more detailed analysis than time permits to reach an informed judgment about the risks in each case. And when we were done with this more detailed analysis, we could reasonably expect that we would still be left with considerable uncertainty.