AUSTIN, Texas Feb 21 The U.S. central bank
needs to rethink its guidance to financial markets on the future
path of interest rates as its unemployment threshold is fast
approaching, a top Federal Reserve official said on Friday.
The Fed has promised to keep rates near zero until well
after the unemployment rate, now at 6.6 percent, falls below 6.5
percent, especially if inflation remains below a 2 percent
Dallas Federal Reserve Bank President Richard Fisher said
that although the jobless rate was a blunt instrument, it was
the best policy-makers had.
"The most important thing is where do you go next, what do
you signal to the markets, what is your 'forward guidance'?" he
told journalists on the sidelines of a University of Texas
business school event.
"We need to signal to the markets, a bit little more clearly
perhaps ... and I think it is hard to do in quantitative terms."