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Forward Guidance & Expectations
A central bank can tighten financial conditions without moving its rate, simply by talking. Markets price the signalled path ahead of the meeting, so a decision moves prices mainly through the gap between what was expected and what is delivered. 10-year breakevens, every FOMC decision since 1990 and the record of recurring policy errors help measure that gap.
3pieces
2in-depth analyses
Where to start
Three reads, in order: the basics, the full mechanism, then what the data says.
01The basics Inflation Expectations: How They Form and Why They Matter Inflation expectations explained: the three formation models, the short-run vs long-run distinction, and why anchored long-term expectations saved 2022-2024 disinflation. AnalysisRead → 
02The full mechanism T10YIE and 10-Year Inflation Expectations: How Markets Price Future Inflation The 10-year breakeven (T10YIE) read by regime since 2003: post-Lehman low, April 2022 high, what the Fed calls anchored, and the gap with realized inflation. In-depth analysisRead → 
03The evidence Every FOMC rate decision since 1990 All 317 Fed rate decisions from 1990 to 2026 in one register: 52 hikes, 58 cuts, 207 holds, every vote and dissenter, 10-year reaction. StudyRead → Related topics
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