However, reflecting the progress in economic understanding, our actions are now better informed about the pitfalls associated with relying on nominal interest rates to set policy and the important role played by inflation expectations in gauging the stance of monetary policy. Our appreciation of the importance of expectations has also shaped our increasing transparency about policy actions and their rationale.
We have moved toward greater transparency at a "measured pace" in part because we were concerned about potential feedback on the policy process and about being misinterpreted - as indeed we were from time to time.