In other words, by allowing the unemployment threshold to pass without taking action, the public might conclude that the Committee could easily decide to let the inflation threshold pass without taking action as well. Competing roles for forward guidance Before we offer further forward guidance, it is important to be clear about what this forward guidance is intended to accomplish.
As Yogi Berra is reported to have said, “You have to be careful if you don’t know where you’re going because you might end up somewhere else.” One way to think of forward guidance is that it is just another step toward increased transparency and effective communication of monetary policy.