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Fed Mulls Explicit Forward Guidance, Stays Wary of Yield Targets

  • FOMC eager to provide new guidance on policy in coming months
  • Policy makers show support for ‘state-based’ forward guidance
The Federal Reserve building.

The Federal Reserve building.

Photographer: Andrew Harrer/Bloomberg
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Federal Reserve officials showed no readiness at their June meeting to commit to yield-curve control, but did reveal an eagerness to provide more guidance in coming months on the future path of interest rates and asset purchases.

“Many participants remarked that, as long as the committee’s forward guidance remained credible on its own, it was not clear that there would be a need for the committee to reinforce its forward guidance with the adoption of a YCT policy,” minutes published Wednesday of the June 9-10 Federal Open Market Committee meeting showed.