May 13 - Federal Reserve Vice-chair Phillip Jefferson said Monday that while it is important for a central bank to communicate clearly with the public, there are times when those communications can get muddled.
The Fed’s second-in-command pointed to two examples. “There is always a risk” that officials’ comments about the future of the economy and monetary policy are “interpreted by the public with a false sense of certainty” that can be mistaken for a fixed view on the outlook, Jefferson said. Jefferson’s take on central bank communications arrives as central bankers try to determine whether the sticky inflation seen over the start of the year will thwart their ability to deliver on forecasts from earlier in the year that penciled in three rate cuts for this year.
At the same time, Fed officials are frequent public speakers, and those speaking opportunities, which on some days can see multiple policy makers opining on the outlook, can leave market participants struggling to find a coherent take on what central bankers believe lies ahead.
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