Nick Timiraos wrote that the Fed’s move into a tightening cycle coincided with a
leadership change, and historically such windows are when forward guidance
matters most. Forward guidance is often tied to the 2008–09 zero‑lower‑bound
era, but the Fed’s use of statements to shape expectations dates to May 1999,
when it began issuing policy statements after meetings that kept rates
unchanged. Six weeks after that 1999 meeting the Fed raised rates; the minutes
show officials wanted to unwind 1998 cuts while avoiding the 1994 surprise
caused by inadequate communication.
