Share this Story : Financial Post Copy Link Email X Reddit Pinterest LinkedIn Tumblr

Terence Corcoran: Central bankers drop ‘Odyssean’ forward guidance

What will markets do without Odysseus to guide them?

You can save this article by registering for free here. Or sign-in if you have an account.

For a couple of decades the Bank of Canada, the United States Federal Reserve and other central banks have been using “forward guidance” in their public communications to help financial markets figure out where interest rates are going. But not any more, according to the latest statements by central bankers such as Kevin Warsh, the new Trump-appointed Fed Chairman.

Subscribe now to read the latest news in your city and across Canada.

Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.

Daily content from Financial Times, the world's leading global business publication.

Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.

National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.

Daily puzzles, including the New York Times Crossword.

Subscribe now to read the latest news in your city and across Canada.

Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.

Daily content from Financial Times, the world's leading global business publication.

Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.

National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.

Daily puzzles, including the New York Times Crossword.

Create an account or sign in to continue with your reading experience.

Access articles from across Canada with one account.

Share your thoughts and join the conversation in the comments.

Enjoy additional articles per month.

Get email updates from your favourite authors.

Create an account or sign in to continue with your reading experience.

Access articles from across Canada with one account

Share your thoughts and join the conversation in the comments

Enjoy additional articles per month

Get email updates from your favourite authors

Sign In or Create an Account

What does this shift in policy mean? Unfortunately, economic papers on monetary policy tend to run to 50-or-more dense pages of economic jargon, graphs and equations that make forward guidance merits and problems near impossible to analyze or explain.

Get the latest headlines, breaking news and columns.

There was an error, please provide a valid email address.

By signing up you consent to receive the above newsletter from Postmedia Network Inc.

A welcome email is on its way. If you don't see it, please check your junk folder.

The next issue of Top Stories will soon be in your inbox.

We encountered an issue signing you up. Please try again

Interested in more newsletters? Browse here.

One bit of jargon may help, however. In an 80-page paper in 2012, Chicago Federal Reserve members described one form of forward guidance as Odyssean.........

© Financial Post