This isn’t my dream of super-clear forward guidance, but it’s a huge step in the direction of Krugman/Woodford style precommitment. The key thing is that they’re no longer saying that accommodative monetary policy is conditional on the recovery being weak. Instead, interest rates will stay low for a while even after the economy recovers. In other words,build that apartment building right now.
A little late, but better than nothing.
Wingnuts and Drudge are flipping out.
I’m so mature.