[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-324590-105":59,"doc-detail-324590-en":131},{"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":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","expectations-communications-and-monetary-policy-consistent-behavior-and-transparency","Expectations, Communications, and Monetary Policy - Consistent Behavior and Transparency","","A speech by Sandra Pianalto on how the Federal Open Market Committee learned to communicate policy more transparently. It argues that consistent behavior under rational expectations supports credible commitment to price stability. It also explains how clearer communication—minutes, reports, appearances, and transcripts—improves monetary policy effectiveness. The speech outlines historical and forward-looking communication categories and proposes additional steps to enhance transparency when beneficial.",{"@graph":69,"@context":123},[70,84,106],{"@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/expectations-communications-and-monetary-policy-consistent-behavior-and-transparency/324590/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/expectations-communications-and-monetary-policy-consistent-behavior-and-transparency/324590.png","ImageObject",300,407,{"name":92,"@type":93},"Ivy","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-29","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",12,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"Why does the speech emphasize consistent behavior for monetary policy?","Question",{"text":113,"@type":114},"Because under rational expectations, policymakers cannot systematically exploit mistakes by the public. Consistent policy behavior and credible commitment to price stability prevent worse outcomes tied to expectations of higher inflation.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"What role does communication play in improving monetary policy effectiveness?",{"text":118,"@type":114},"The speech states that communications help explain policy decisions and intentions, making policy implementation more effective by aligning public understanding with how the Committee will respond to economic conditions.",{"name":120,"@type":111,"acceptedAnswer":121},"What types of information does the FOMC provide through its communications?",{"text":122,"@type":114},"It distinguishes historical information—the rationale for decisions already taken—from forward-looking information, namely views on the future state of the economy and intentions regarding likely policy actions.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},324590,1790615280,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},549758252649,"https://ap-avatar.wpscdn.com/avatar/8000253669c5317157?_k=1778319167496531819","by Sandra Pianalto  \nMy remarkswilcenter onepectu-tions,communications,and monetarypolicy.Specifically,I would like toshare with you my thinking on how theFederal Open Market Committee has“learned to talk”—in other words,howthe FOMC has evolved from beingregarded as secretive to now beingviewed as more transparent.My discus-sion will emphasize three points.  \nFirst,consistent behavior matters.  \nSecond,the FOMC's communicationshow we talk about policy goals andactions—have played an important rolein enhancing the effiectiveness of mone-tary policy.  \nThird,we should consider taking addi-tional steps toward greater transparencywhen it seems likely that they can fur-ther enhance the effectiveness of mone-tary policy.  \nPlease note that the viewsl expresstoday are mine alone.I do not presumeto speak for any of my colleagues in theFederal Reserve System.  \n■ Consistent Behavior MattersLet me begin,then,with why I thinkconsistent behavior matters.One of themost important insights of modernmacrocconomics is rational expecta-tions.Economists have always recog-nized that expectations guide the behav-ior of individuals,businesses,andpolicymakers.But central bankers owe agreat deal to the academics who led therational expectations revolution of the1970s and 1980s.One oftheir keyinsights is that although people are  \nExpectations,Communications,andMonetary Policy  \nbound to makemistakes in assessingpolicies,policymakers themselves can-not systematically exploit these errors.  \nSpecifically,in the case of monetary pol-  \nicy,people wll recognize when centralbankers have incentives to try to trade alittle inflation for extra short-run output.For example,if people believe that thecentral bank is willing to boost eco-nomic activity in the short run by creat-ing greater-than-expected inflation,thenthey will come to expect the highestinflation rate that the central bank willtolerate.This is clearly a worse outcomefor everyone compared with a situationin which people expect—and the centralbank delivers—price stability.Establish-ing a credible commitment to price sta-bility,and conducting monetary policyconsistent with that commitment,solvesthis problem.  \nMany of you will recognize this line ofthinking as one that began with FinnKydland and Edward Prescott,and waslater enriched by other economists.Kyd-land and Prescott were awarded the 2004Nobel Prize in economics partly becauseof this research.  \nAs a result of this rational expectationswork,and the research it prompted,acad-emic economists began to encourage pol-icymakers to follow predictable rules ofbehavior.The new theories emphasizedthe importance of consistent bchaviorand created a whole new context forthinking about central bank disclosure.  \nThe burden of proof for maintainingsecrecy began to shift.Economists beganto challenge policymakers to providemore information,and for good reason.People spend resources trying to figure  \nApril 15,2005  \nSince early 1994,the FOMC hastaken many steps toward increasingthe amount of information it conveysto the public about its actions.San-dra Pianalto,a Federal ReserveBank president and FOMC partici-pant,outlines the evolution ofincreasing transpareney in FOMCcommunications and suggests a waythat the process can go further stillThis Commentary is taken fromPianalto's speech to the MoneyMarketeers in New York City onApril 19,2005.  \nout what policymakers are doing,andthen decide how much to save,whatkinds of assets to acquire,which skills tolearn,and so on.These decisions,in fum,affect the economy's future growth path  \nI think that the new emphasis on consis-tent behavior puts an even higher pre-mium on disclosure.In the simpleworlds ofeconomic models,it is rela-tively easy to specify an appropriate pol-icy rule for setting the federal funds rate.But in the real world,this is a muchharder task.It is nearly impossible tospecify in advance all of the situationsthat might arise and how the centralbank should react to them.However.I do think we get clos","cbCaioR8KLEPvcL3","https://ap.wps.com/l/cbCaioR8KLEPvcL3","pdf",1142415,"English","# Consistent Behavior Matters\n## Rational expectations and credible commitment\n# The FOMC's Communications\n## Public information channels\n## Historical vs forward-looking information","[{\"question\":\"Why does the speech emphasize consistent behavior for monetary policy?\",\"answer\":\"Because under rational expectations, policymakers cannot systematically exploit mistakes by the public. Consistent policy behavior and credible commitment to price stability prevent worse outcomes tied to expectations of higher inflation.\"},{\"question\":\"What role does communication play in improving monetary policy effectiveness?\",\"answer\":\"The speech states that communications help explain policy decisions and intentions, making policy implementation more effective by aligning public understanding with how the Committee will respond to economic conditions.\"},{\"question\":\"What types of information does the FOMC provide through its communications?\",\"answer\":\"It distinguishes historical information—the rationale for decisions already taken—from forward-looking information, namely views on the future state of the economy and intentions regarding likely policy actions.\"}]","Expectations, Communications, and Monetary Policy - Consistent Behavior and Transparency | PDF",1789968342,13]