July 12 - The ECB and Bank of England have undergone a momentous change in their communication policy over their outlook in the past week. And it is set to stay that way.(Factbox - no reporter narration).
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Hello markets! Welcome to the age of "Forward Guidance" Fed sparks market turbulence by floating its QE exit plan Market turmoil forced ECB and BoE to give forward guidance for the first time The ECB now says rates will stay at record lows for "extended period" and could fall further ECB's Joerg Asmussen tells Reuters the pledge was good for "beyond" 12 months The BoE gives forward guidance on forward guidance: More details in August Central bank guidance has come a long way... Fed only starts publishing interest rates in 1994 Before then, markets had to figure them out First to give regular guidance was the Reserve Bank of New Zealand in 1997. Sweden's Rjiksbank and Norway's Norges Bank follow shortly after In 2011, Fed chooses calendar guidance, pledges to keep rates low until at least 2013 Fed guidance now data-driven -- rates to remain near zero... ...until jobless rate falls to 6.5 pct and inflation not seen rising above 2.5 pct on two-year horizon Data-driven guidance likely will be route forward for most central banks "Forward guidance seems to be the new black among central bankers." Nordea Analyst Anders Svendsen