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Why It's So Hard to Predict Interest Rates

Fed's lack of specific guidance is leaving investors dazed and confused.

By Steve Matthews, Bloomberg | Updated on June 10, 2016

Janet Yellen says she doesn’t want investors to rely on the Federal Reserve for explicit guidance on the next interest-rate hike—a communication strategy that’s leaving some flatly confused about the path of monetary policy.

Speaking Monday in Philadelphia, the Fed chair said “only on rare occasions” will the central bank spell out when it’s going to move. “I really think the best we can legitimately do is explain what factors are guiding our thinking,” she told the audience, referring to the Fed’s intention to make policy data-dependent.

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