Fed’s rate guidance is ‘explicit,’ investors should watch outcomes By Reuters

© Reuters. FILE PHOTO: Federal Reserve Bank of Richmond President Thomas Barkin poses during a break at a Dallas Fed conference on technology in Dallas

WASHINGTON (Reuters) – Investors evaluating Fed policy should focus on the central bank’s “explicit” guidance on its plans and the relevant economic outcomes, not on second-guessing far ahead of time when interest rates or the pace of monthly asset purchases might change, Richmond Federal Reserve President Thomas Barkin said on Monday.

The guidance from the Fed “is as clear and explicit as we have seen,” pegging any interest rate increase to inflation exceeding the Fed’s 2% target and a return to full employment, and any change in asset purchases to significant progress towards those goals, Barkin told Bloomberg Television.

“The challenge for investors is to not try to turn that into calendar based guidance but to say lets see how the outcomes go.”

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