Mr. Walr, a member of the Federal Reserve, said that if forward guidance is applied correctly, it could accelerate the impact of monetary policy, similar to the late‑2021 period. He described forward guidance as a valuable tool that has helped strengthen policy at times and will continue to be useful.
However, he warned that overly strong or inflexible guidance could become a hindrance. When policymakers face multiple plausible economic scenarios, forward guidance can also become problematic. Walr did not provide comments on the current economic outlook or monetary policy stance.