Cleveland Fed Loretta Mester muses:
“How do you have June be a viable alternative, but not lock the committee into necessarily moving in June?” she said. “That is a challenge for communication.”
Ms. Mester is arguing more broadly for a rewrite of the Fed’s script. She said the Fed’s policy statements have gotten unwieldy, overloaded with code words that the public doesn’t well understand.
“We should try to simplify our statements over time,” she said. “We talk in code….We would probably do better to be a bit more plain-spoken.”
Having a misleading and anyway obsolete inflation targeting policy regime, it is hard (maybe impossible) to become “a bit more plain spoken”.
They could be much more plain spoken and clear if, while keeping the stable prices and maximum employment Congressional mandate (a consequence of having nominal stability), they changed to having an NGDP level target, the best means available for producing nominal stability.