But Giles suggested, “I’m sure we can all do better than that.” He took a stab at translating the sentence himself, suggesting that it meant “the MPC will let the recovery run for as long as it can,” but he invited others who might have “better, more elegant and more accurate translations” to submit them via social media. Later that day, he announced the best summation received. Forward guidance expressed in a two-word sentence: “We’ll see.” 6 That about sums it up. The FOMC is seeking to make sure that we have a sustained recovery without giving rise to inflation or market instability. We will conduct monetary policy accordingly. Regardless of the way we may finally agree at the FOMC to write it out or have Chair Yellen explain it at a press conference, we really cannot say more than that. 5  From Churchill by Himself: The Definitive Collection of Quotations, edited by Richard Langworth, Philadelphia: Perseus Books Group, 2008, p. 17. Langworth cites Churchill from March 15, 1926. 6  “Forward guidance in a sentence,” by Chris Giles, Financial Times, Money Supply (blog), Oct. 2, 2013. Giles announced the “forward guidance in a sentence … winner” on Twitter later that same day. BIS central bankers’ speeches  5  So that’s where we are: “We’ll see.” Or as Deng Xiaoping would have phrased it: “We will cross the river by feeling the stones” ( 摸 石 頭 過 河).
On asset purchases: “If incoming information broadly supports the committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the committee will likely reduce the pace of asset purchases in further measured steps ...” On the timing of liftoff: “The committee continues to anticipate ... that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends ...” On the post-liftoff path of the funds rate: “The committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the committee views as normal in the longer run.” As a former practitioner, I can tell you that market operators prefer Odyssean guidance to Delphic guidance, and within the Odyssean model, tend to prefer inflexible, calendar-based guidance to guidance that’s either conditional or qualitative. Life in my former incarnation would naturally be much more pleasant if I could dial in the specific dates and levels of interest rate movements. But as a central banker, I am haunted by a comment made by Winston Churchill in 1926, shortly before things began to unravel in the global financial  4  BIS central bankers’ speeches  markets.