I have asked the communications subcommittee of the FOMC to explore ways in which we can more effectively communicate about the role of the rate projections. For now, let me leave you with a cautionary tale about focusing too much on dots. Here is a picture composed of different colored dots (figure 2).
The meaning of a policy statement — preferably only one — must be established by the central bank, through consistent practice over time and through more extended discussion of what the language means” (Poole, 2003). Furthermore, expression of intention is not a one-off affair; on the contrary there are elements of incrementality in communication and reputation plays a role.