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Economic Commentary

Considerable Period of Time: The Case of Signaling Future Policy

There has been a remarkable increase in FOMC communication over the last decade. Perhaps the most dramatic change was the inclusion of language indicating the possible direction of future policy. One example is the now famous “considerable-period” language that was inserted in August 2003. This forward-looking language was remarkable in that it seemingly signaled the Committee’s intention to keep rates low for an extended period. This Commentary analyzes the reasons behind the “considerable period-of-time” language, and it argues that such language was important to stem further declines in inflation since the funds rate was already close to its lower bound of zero.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Carlstrom, Charles T., and Timothy S. Fuerst. 2005. “Considerable Period of Time: The Case of Signaling Future Policy.” Federal Reserve Bank of Cleveland, Economic Commentary 11/1/2005.