Economy Talk

What "no forward guidance" means for regular people (not traders)

Warsh said at Jackson Hole that forward guidance "overstayed its welcome". I see many people confused, so here is how I understand it.

Before: the Fed would hint for months what it planned to do, so banks and markets adjusted early. Now: the Fed decides meeting by meeting, based on data. For you, this means mortgage and loan rates can move more suddenly after big data releases. If you need a fixed rate on something, being early is maybe better than waiting for a "signal" that may never come.

I am skeptical this makes things calmer, but at least it is honest.