Yellen: Fed has some options on forward guidance

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Yellen: Fed has some options on forward guidance
WASHINGTON (MarketWatch) - The Federal Reserve is considering more than one way to give greater insight to financial markets on how shifts in the economic outlook could impact the central bank's decision to hold short-term interest rates at zero, Federal Reserve Vice Chairman Janet Yellen said Friday. Many expect the Fed to enhance its guidance after the next FOMC meeting on Nov. 1 and 2. Yellen said there may be "pitfalls" with an approach by Chicago Fed Bank President Charles Evans suggesting that the Fed disclose specific numerical thresholds for unemployment and inflation. Such thresholds may be taken as the Fed's new targets for inflation and unemployment, according to Yellen. She said another approach might be for the Fed to give more information about its targets, "the factors that influence our policy decisions and our views on the likely evolution of monetary policy" in the separate statement that contains FOMC economic forecasts.