Reactions of real yields and inflation expectations to forward guidance in the United States

Richhild Moessner
2015 Applied Economics  
We study the impact of forward guidance used as an unconventional monetary policy tool at the zero lower bound of the policy rate on real and breakeven US Treasury yield curves. We ...nd that explicit FOMC policy rate guidance announcements led to a signi...cant reduction in real yields. By contrast, breakeven in ‡ation rates were barely a¤ected, if at all, suggesting that in- ‡ation expectations have remained well-anchored, and that explicit FOMC policy rate guidance has not adversely a¤ected
more » ... entral bank credibility. JEL classi...cation: E52, E58, G15.
doi:10.1080/00036846.2015.1008759 fatcat:jskyrrpz2vfobie7m3uonsazye