Waller: Monetary policy transmission depends on the flexibility of initial conditions and forward guidance

Federal Reserve Governor Waller proposed two views on the transmission mechanism of monetary policy: first, initial conditions are crucial, and monetary policy evaluation should be based on the current economic state rather than historical averages; Secondly, forward guidance can accelerate policy transmission in certain situations, but if it is too rigid or lacks flexibility, it can weaken policy effectiveness and delay policy adjustments. Policy formulation needs to maintain adaptability to different contexts.