A leading expert of monetary policy is urging the Fed to reform its policy guidance to make...

|By:, SA News Editor

A leading expert of monetary policy is urging the Fed to reform its policy guidance to make clear it will hold interest rates close to zero, even after the economy starts to recover. Columbia's Michael Woodford told officials they need to better explain the reason behind any rate forecast, because current guidance could be having a perverse impact of simply implying that the economy is going to be weak until the end of 2014, which will not entice businesses or consumers to increase spending.