in my view, economic conditions have modestly improved since our december meeting, especially on the employment front, and the downside risk of a double - dip recession that many feared in september when the committee instituted “ operation twist ” has substantially abated. thus, with the economy gradually improving, i saw little justification to further ease monetary policy and felt it risked undermining confidence in the process. in addition, i don ’ t support the practice of offering forward policy guidance by saying economic conditions are likely to lead to low rates through some calendar date. such statements are, in my mind, particularly problematic from a communications perspective. monetary policy should be contingent on the economic environment and not on the calendar. for example, i often read comments in the media that the fomc has “ pledged ” or “ vowed ” to keep rates at zero at least until late 2014. but this is clearly incorrect. the fomc has made no such commitment and the statement indicates as much – if economic conditions change, then so will policy. yet there continues to be confusion and the confusion stems from our statement. in my view, there are much better ways to communicate information about the future path of policy than the use of calendar dates. indeed, one of these ways was provided in january when we began providing information on the policy paths that underlie fomc participants ’ forecasts. improving communications so let me turn to our communication initiatives, which have received a fair amount of attention in the financial press. improving the transparency of monetary policy has always been high on my list of things to do since joining the federal reserve bank of philadelphia in bis central bankers ’ speeches 2006. the federal reserve is accountable to the public, so it needs to clearly communicate its goals and its approach to making policy decisions. to its credit, the federal reserve has strived to increase transparency about its actions and its policies, particularly during the tenure of chairman ben bernanke. for instance, in an effort to improve its communications to the public, the fomc decided in 2007 to release its summary of economic projections, or sep, four times a year. in 2011, chairman bernanke introduced press briefings to provide additional context for the fomc ’ s policy decisions following the release of the sep. however, until now, these releases did not include any information about the assumptions policymakers made about the path of monetary policy. therefore, it was difficult for the public to interpret the projections for growth, employment, and inflation

charles i plosser : communication challenges speech by mr charles i plosser, president and chief executive officer of the federal reserve bank of philadelphia, before the 2014 us monetary policy forum – “ initiative on global markets ”, at the university of chicago booth school of business, new york city, 28 february 2014. * * * the views expressed are my own and not necessarily those of the federal reserve system or the fomc. highlights • president plosser believes the federal open market committee has to revamp its current forward guidance regarding the future federal funds rate path because the 6. 5 percent unemployment threshold has become irrelevant. • president plosser points out that before offering new forward guidance, the fomc ought to be clear about its purpose. is it purely a transparency device, or is it a way to commit to a more accommodative future policy stance to add more accommodation today? • president plosser notes that commitment is required to be successful in either approach to forward guidance. policymakers cannot maintain discretion and simultaneously commit to forward guidance and expect that guidance to be effective. introduction it is a pleasure to return to this event. the organizers have put together another great and timely program with distinguished participants. however, with governor stein and presidents kocherlakota, evans, and myself all here, i am beginning to wonder if we are in washington rather than in new york. nevertheless, it is great to be on the program with so many of my fellow policymakers. if you listen carefully to each of us, you will understand why i start with the usual caveat that my remarks represent my own views and not necessarily those of the federal reserve system or my colleagues on the federal open market committee ( fomc ). communication and transparency have been important themes in monetary policy discussions over the past decade or more. indeed, in 2007 this monetary policy forum began with alan blinder ’ s keynote address titled “ making monetary policy and talking about it. ” in part, this emphasis on communication and transparency reflects the steady evolution in the theory and science of monetary policy. reflecting this emerging consensus, the federal reserve during the tenure of chairman bernanke has taken a number of actions to promote increased transparency about its actions and policies. in fact, president evans and i served on a subcommittee led by current chair yellen specifically focused on improving communication. our efforts to improve communication took on heightened importance as the fomc responded to the financial crisis and recession. since december 2008