Yellen gives a speech full of explanations

Fed chair Janet Yellen's speech today was packed with explanations about current US policy, including a detail on the nature of the FOMC's expectation of a slow pace of future policy tightening:

... this guidance should be understood as a forecast for the trajectory of policy rates that the Committee anticipates will prove to be appropriate to achieve its objectives, conditional on the outlook for real economic activity and inflation. Importantly, this forecast is not a plan set in stone that will be carried out regardless of economic developments. Instead, monetary policy will, as always, respond to the economy's twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals assigned to us by the Congress.

Yellen also underlined the crucial role of transparent and consistent communication in managing public's expectations:

I continue to strongly believe that monetary policy is most effective when the FOMC is forthcoming in addressing economic and financial developments such as those I have discussed in these remarks, and when we speak clearly about how such developments may affect the outlook and the expected path of policy.

Well said.