[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-324559-105":59,"doc-detail-324559-en":124},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":117,"head_meta":119,"extra_data":121,"updated_unix":123},105,"en","considerable-period-oftime-the-case-of-signaling-future-policy","Considerable Period ofTime - The Case of Signaling Future Policy","","Charles T. Carlstrom and Timothy S. Fuerst discuss one rationale for the Federal Open Market Committee’s forward-looking language, focusing on the “considerable-period-of-time” wording introduced after the August 2003 meeting. The analysis explains how communication and transparency about policy intentions can influence market expectations when the federal funds rate nears its lower bound, helping support longer-term rates, inflation, and output. It also addresses the credibility need behind adopting this signaling approach.",{"@graph":69,"@context":116},[70,84,99],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/considerable-period-oftime-the-case-of-signaling-future-policy/324559/",{"url":83,"name":65,"@type":85,"author":86,"headline":65,"publisher":89,"fileFormat":92,"inLanguage":63,"description":67,"dateModified":93,"datePublished":93,"encodingFormat":92,"isAccessibleForFree":94,"interactionStatistic":95},"DigitalDocument",{"name":87,"@type":88},"Emma Wilson","Person",{"url":74,"name":90,"@type":91},"DocShare","Organization","application/pdf","2026-09-21",true,{"@type":96,"interactionType":97,"userInteractionCount":4},"InteractionCounter",{"@type":98},"ViewAction",{"@type":100,"mainEntity":101},"FAQPage",[102,108,112],{"name":103,"@type":104,"acceptedAnswer":105},"What problem does the “considerable-period” language aim to address?","Question",{"text":106,"@type":107},"It aims to stem further inflation declines when the federal funds rate is near its lower bound, limiting further conventional rate cuts and raising concern about deflation.","Answer",{"name":109,"@type":104,"acceptedAnswer":110},"How can forward-looking policy communication affect economic outcomes?",{"text":111,"@type":107},"By signaling the expected path of future short-term rates, the FOMC can reduce longer-term interest rates, stimulating output and increasing inflation today.",{"name":113,"@type":104,"acceptedAnswer":114},"Why was credibility important around the August 2003 change?",{"text":115,"@type":107},"The document emphasizes that the effectiveness of such signals depends on whether markets believe the stated intention, motivating the “need for credibility” after that meeting.","https://schema.org",{"og:url":83,"og:type":118,"og:title":65,"og:site_name":90,"og:description":67},"article",{"robots":120,"canonical":83},"index,follow",{"doc_id":122,"site_id":62},324559,1789968248,{"code":4,"msg":5,"data":125},{"doc_id":122,"user_id":126,"nickname":87,"user_avatar":127,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":128,"file_id":129,"file_url":130,"file_type":131,"file_size":132,"view_count":4,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":133,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":134,"faqs":135,"seo_title":136,"seo_description":67,"update_tm":123,"read_time":137},3848291630094,"https://eur-avatar.wpscdn.com/davatar_085a072bc5b1113ac321206ff7593b45","by Charles T.Carlstrom and Timothy S.Fuerst  \nDuing AIa Gicenspan stmume,liincrease in the communication andtransparency of FOMC decisions hasbeen remarkable.Prior to 1994,theFOMC did not even announce its targetfor the federal funds rate,leaving mar-kets to infer it from subsequent openmarket operations.Yet since February1994,the FOMC has issued a statementafter each meeting indicating the fundsrate target decided upon during thatmeeting.In December 1998,the FOMCalso began to include in its statement thecurrent \"bias,\"indicating possiblebehavior offuture policy.In December1999,this forward-looking behavior wasmodified to include a “balance of risk”assessment.This forward-looking policystatement was then amplified after theAugust 2003 meeting in which theFOMC introduced the now famous\"considerable-period\"language,statingthat “the Committee believes that policyaccommodation can be maintained for aconsiderable period.\"In January 2004,this outlook was weakened slightlywhen the FOMC stated that \"the Com-mittee believes that it can be patient inremoving its policy accommodation.\"Finally,in June 2004,the language wasagain modified to indicate that theFOMC would start increasing rates,butthat this policy accommodation wouldbe removed at a\"measured pace.\"  \nThis Commentary looks at one possiblerationale for forward-looking languagein FOMC communications.In particu-lar,we analyze advantages of the\"considerable-period-of-time\"languageand suggest why the FOMC may havedecided to introduce this statement afterthe August 2003 meeting.  \n# Considerable Period ofTime:The Case of Signaling Future Policy\n\nNominal Interest Rate BoundOne troubling development in the eco-nomicenvironment around the time theconsiderable-period language was intro-duced was the possibility of deflation(negative inflation rates).Figure I showsthat inflation had fallen from 3 percent atthe beginning of2001 to nearly 1 percentby mid-2003.There was a general con-cem that ifthe inflation trend continuedthere could be deflation.Although theprobability of an actual deflation wasconsidered small,many were concemedthat the costs of deflation were potentiallylarge.Figure I also shows that the Com-mittee responded by continually decreas-ing the funds rate through the meeting onJune 25,2003,at which point the fundsrate had dropped to an unprecedentedI percent  \nThe possibility of deflation remained,but since nominal rates cannot fall belowzero,there was the added concern thatlittle additional monetary stimulus wasavailable if the FOMC needed it.Inother words,a l percent funds rate isonly a few policy moves away fromzero.Because of this limited downwardmaneuverability,there was a reluctanceto decrease the funds rate any further.But even if the current funds rate is keptconstant,there is another policy tool atthe FOMC's disposal:the ability toinfluence market expectations of futurepolicy movements  \n## ■ Signaling the Future toInfluence Today\n\nPolicymakers have limited tools withwhich they can influence inflation andoutput.The most obvious tool is the cur-rent federal funds rate.But there isanother tool:anticipated future move-ments in the funds rate,which affect  \nNovember 2005  \nThere has been a remarkableincrease in FOMC communicationover the last decade.Perhaps themost dramatic change was theinclusion of language indicating thepossible direction of future policy.One example is the now famous“considerable-period”language thatwas inserted in August 2003.Thisforward-looking language wasremarkable in that it seeminglysignaled the Committee's intention tokeep rates low for an extendedperiod.This Commentary analyzesthe reasons behind the “considerable-period-of-time\"language,and itargues that such language was impor-tant to stem further declines in infla-tion since the funds rate was alreadyclose to its lower bound of zero.  \ninflation and output today.That is,theFOMC can either change the currentfunds rate or draft language in the policystatement that is meant to influenceexpectati","cbCaij1sUOmkRACX","https://ap.wps.com/l/cbCaij1sUOmkRACX","pdf",1165801,"English","# Considerable Period ofTime: The Case of Signaling Future Policy\n## Signaling the Future to Influence Today\n## August 2003 and the Need for Credibility","[{\"question\":\"What problem does the “considerable-period” language aim to address?\",\"answer\":\"It aims to stem further inflation declines when the federal funds rate is near its lower bound, limiting further conventional rate cuts and raising concern about deflation.\"},{\"question\":\"How can forward-looking policy communication affect economic outcomes?\",\"answer\":\"By signaling the expected path of future short-term rates, the FOMC can reduce longer-term interest rates, stimulating output and increasing inflation today.\"},{\"question\":\"Why was credibility important around the August 2003 change?\",\"answer\":\"The document emphasizes that the effectiveness of such signals depends on whether markets believe the stated intention, motivating the “need for credibility” after that meeting.\"}]","Considerable Period ofTime - The Case of Signaling Future Policy | PDF",13]