“Federal Reserve microphone” Nick Timiraos wrote that when Walsh took office, it coincided with the Fed's shift to a cycle of austerity; judging from historical experience, this period is often a stage where “forward-looking guidance” plays a key role. People generally think that “forward-looking guidance” originated in the period of ultra-loose monetary policy in 2008-2009 and the subsequent period of ultra-loose monetary policy, because the Federal Reserve did rely heavily on this tool when interest rates hit the “zero floor” at the time. But in reality, the history of forward-looking guidance dates back to 1999. At the time, Federal Reserve officials wanted to withdraw the 1998 interest rate cut, and at the same time they wanted to avoid repeating the mistake of catching the market by surprise due to lack of communication when the interest rate was raised in 1994. As a result, in May 1999, the Federal Reserve first attempted to issue a policy statement after a meeting to keep interest rates unchanged. Previously, the Federal Reserve would only issue a statement after a meeting to adjust interest rates. Six weeks later, the Federal Reserve raised interest rates. The minutes of the May 1999 meeting showed that officials were aware of the high possibility of interest rate hikes at the time and hoped to use this to guide market expectations. Officials don't want the market to misinterpret their policy intentions.

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