Economic Conditions and Monetary Policy

In order to set monetary policy appropriately, policymakers need to assess current economic conditions, understand how the economy got where it is, and have a good idea of where it is heading. Because economic conditions are always in flux, good communications are important to successful policymaking. Communications can help the public appreciate policymakers’ objectives, understand their thinking about the prospects for meeting those objectives, and consider how new information might affect policy choices. This Commentary was adapted from a speech given to the Broadcast Cable Financial Management Association on June 12, 2006, in Orlando, Florida.