policy, based on economic data. at the end of december, the philadelphia fed issued an example of what such a discussion might look like in a monetary policy report. we used a set of policy rules to benchmark the current stance and path of policy and discussed the implications. 4 the report showed that the federal funds rate is no longer constrained by the zero lower bound under a number of these rules. in fact, the rules indicate that maintaining the federal funds rate at the zero lower bound is unusually accommodative by historical standards. the benchmarks suggest that as the economy transitions to full employment and moves closer to its long - run inflation target, we should begin to gradually reduce accommodation by raising the funds rate target. delaying liftoff runs the risk of requiring more aggressive future monetary policy than would otherwise be needed. however, if the committee felt it was desirable to further delay the initiation of interest rate increases, such a report would provide the opportunity, indeed the obligation, for a thorough and thoughtful discussion about why discretionary deviations from the guideposts were appropriate. thus, publishing a monetary policy report with an assessment of the likely near - term path of policy rates, in conjunction with its economic forecast, would be a useful exercise and see charles i plosser, “ systematic monetary policy and communication, ” remarks to the economic club of new york, new york, ny, june 24, 2014 ; and charles i plosser, “ monetary rules : theory and practice, ” remarks to the hoover institution, stanford, ca, may 30, 2014. see http : / / www. philadelphiafed. org / research - and - data / publications / special - reports / 2014 / 1231 - using - rules - forbenchmarking. pdf. bis central bankers ’ speeches enhance communications. it would also provide added discipline for policymakers to stick to a systematic, rule - like approach. and it would force policymakers to think more deeply and systematically about policy and the justification for significant deviations from the guideposts. preserving independence i believe such communication would ultimately strengthen the independence of the central bank, which is the fourth and final principle of sound central banking. central bank independence leads to better economic outcomes. but in a democratic society, independence must be accompanied by accountability. transparent and clear communication of monetary policy goals and a decision - making framework help ensure accountability and preserve central bank independence. transparency can also enhance a central bank ’ s credibility. a central bank that is transparent

effects of lower oil prices fade. in summary, i believe the economy has returned to a more normal footing, and as such, i believe that monetary policy should follow suit. in doing so, i believe we should strengthen our commitment to four fundamental principles of sound central banking. during the past eight years, i have spoken and written frequently about ways to improve the framework we use for making monetary policy decisions. in my view, the monetary policy framework is most effective when the central bank : • commits to a set of clearly articulated objectives that can be feasibly achieved by monetary policy ; • conducts monetary policy in a systematic, rule - like manner ; • communicates its policies and actions to the public in a clear and transparent way ; and • protects its independence by being transparent and credible in pursuit of its goals. clearly articulating objectives let ’ s consider these four principles, beginning with clearly articulating the objectives of monetary policy. congress set our monetary policy goals in the federal reserve act, which specifies that the fed “ shall maintain long run growth of the monetary and credit aggregates commensurate with the economy ’ s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate longterm interest rates. ” since moderate long - term interest rates generally result when prices are stable, many have interpreted these goals as a dual mandate to manage fluctuations in employment in the short run while preserving price stability in the long run. in my view, this dual mandate has contributed to a view that monetary policy can accomplish far more than perhaps it is capable of achieving. i believe that assigning multiple objectives for the central bank has opened the door to highly discretionary policies, which can be bis central bankers ’ speeches justified by shifting the focus or rationale for action from goal to goal. that is why i have argued that congress ought to redefine the fed ’ s monetary policy goals to focus solely, or at least primarily, on price stability. i base this on two facts : monetary policy has a very limited ability to influence real variables, such as employment. even the fomc ’ s own statement of longer - run goals adopted in 2012 notes that the maximum level of employment is largely determined by nonmonetary factors, such as changing demographics and changing tax and regulatory policies that influence the labor market. conversely, in a regime with fiat currency, only the central bank can ensure price stability. indeed, it is the one goal