SALT LAKE CITY, Nov 2 (Reuters) - The Federal Reserve’s use of calendar dates to guide expectations about monetary policy has been surprisingly effective, a top Fed official said on Friday.
“The calendar date has been pretty effective at aligning expectations with our own view,” San Francisco Fed President Williams told reporters after a speech here. “There’s a little bit in my mind of, if it ain’t broke, don’t fix it.”
Fed policy-makers have been considering a switch to using numerical thresholds to guide monetary policy. Chicago Fed President Charles Evans has been a big proponent of the idea, saying the Fed should vow low rates until unemployment falls below 7 percent, as long as inflation does not threaten to rise about 3 percent.
Williams said that in theory he prefers the idea of tying policy to economic indicators, but that in practice he is worried that it is too difficult to get it right.