act : a memoir of a crisis and its aftermath ( new york : w. w. norton ), p. 532. see feroli and others, “ language after liftoff, ” in note 1, p. 29. board of governors of the federal reserve system ( 2015 ), “ federal reserve issues fomc statement, ” press release, september 17, paragraph 2. bis central bankers ’ speeches increase from 38 percent to 50 percent. 14 the october and november non - farm payroll reports came in strong and above expectations, raising that probability by the time of the december meeting to about 90 percent. in other words, the committee used modest time - based guidance to set the stage and then let incoming data do the heavy lifting. in the statement released after the fomc ’ s most recent meeting in january, the committee said that, in evaluating future adjustments to the target range for the federal funds rate, it would “ assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. ” 15 15 this language shows that the committee has moved away from the time - based guidance of the crisis years. although time - based guidance can create communications challenges, i see other factors as having been more important in recent years. in particular, the challenge of deciding when and how to use unconventional tools – and ultimately when and how to reduce that usage – is a great one. the task of communicating clearly about those decisions is equally great. and the reality of the fomc ’ s size and diversity, not to mention uncertainty about the evolving structure of the economy and the effects of monetary policy actions, means that we are still far from the ideal world of a fully worked out, clearly specified and transparent consensus on what economists call a “ reaction function ” – a complete description of how policy will respond to changes in economic conditions. often when communicating about the path of policy, it will be hard to avoid a combination of the two forms of guidance. for example, the committee has embraced the view that the equilibrium level of the federal funds rate is currently below its pre - crisis level and expects the funds rate to return only gradually to its longer - run value. 16 this view is a key aspect of many committee participants ’ reaction functions, including mine. try saying that without referring to time. the authors acknowledge that the distinction between rules and discretion is too simple to capture the problems that monetary policymakers face. 17 i would say the same of the distinction between time -

after the review is complete. thank you, and i look forward to our conversation. 1 the views expressed are my own and not necessarily those of other federal reserve board members or federal open market committee participants. i am grateful to brian doyle of the federal reserve board staff for his assistance in preparing this text. 2 see board of governors of the federal reserve system ( 2019 ), “ federal reserve issues fomc statement, ” press release, march 20. 3 see board of governors of the federal reserve system ( 2019 ), “ balance sheet normalization principles and plans, ” press release, march 20. 4 information about the review and the events associated with it are available on the board ’ s website at www. federalreserve. gov / monetarypolicy / review - of - monetary - policy - strategy - tools - and - communications. htm. 2 / 2 bis central bankers'speeches