Insights for action, for global investors

Like any issuer of securities, the department is itself part of the market.

Donald L. Luskin is correct in his op-ed “Warsh Is Wise to Ditch the Dots” (Aug. 17) that the Federal Reserve should abandon forward guidance, and the examples he provides of its negative outcomes are persuasive. Some may counter that Fedspeak isn’t meant to provide indefinite guidance. Rather, the central bank’s public statements serve only as the Fed’s best assessment of the near-term macroeconomic trajectory. Moreover, such information provides immediate clarity to markets, they contend, especially during turbulent episodes.

On that front, too, recent examples show forward guidance to be counterproductive…