With regard to the communication of monetary policy, one possibility would be to supplement the interest rate forecast with a promise to condition the policy on a particular development in the economy, for instance that inflation should reach a certain level before the policy rate is raised. This kind of conditionality can be regarded as a way of reducing the risk that monetary policy will put the brakes on too early in an economic upturn. This, in turn, can be seen as a means of emphasising the importance of symmetry in the inflation target. One problem for the Riksbank and many other central banks over the past decade has been that inflation has tended to systematically undershoot the target. The importance of treating the inflation target symmetrically and not putting the brakes on too early in economic upturns also appear to have been guiding principles for the strategy changes announced by the US Federal Reserve at the end of 19  Clarida (2019) premised in May 2019 that the review the Federal Reserve had begun earlier the same year was “more likely to produce evolution, not a revolution, in the way we conduct monetary policy”. 10 [15]  August. I think these changes are interesting and thought-provoking, and the Riksbank will analyse them thoroughly. References Ball, Laurence M. (2014), “The Case for a Long-Run Inflation Target of Four Percent”, Working Paper WP/14/92, IMF. Blanchard, Olivier, Giovanni Dell’Ariccia and Paolo Mauro (2013), “Rethinking Macro Policy II: Getting Granular”, IMF Staff Discussion Note 13/03, International Monetary Fund.
Let me also say that we are experiencing a period of market nervousness, a period where we see volatility in markets in general and re-appreciation of risks. We think that these developments in financial markets deserve attention. Shifts in market sentiment need careful monitoring. We will continue to pay great attention to the developments in the market over the period to come. I am now open to questions. BIS Review 89/2007  1