The International Monetary Fund's chief economist said the Federal Reserve's plan to reduce forward rate guidance is entirely appropriate, though central banks will always need to provide some long-term guidance for markets. Pierre-Olivier Gourinchas told Reuters that strong forward guidance had gotten really bad press because it committed central banks to future action regardless of economic developments, and such rigid guidance proved very costly when U.S. inflation surged in 2021 and 2022 but the Fed did not act quickly. Fed Chair Kevin Warsh has launched an ambitious review and organized a unanimous consensus around a stripped-down policy statement that jettisoned near-term forward guidance. Gourinchas noted that markets, businesses and banks are always looking for clues to guide investments and set mortgage rates, so central banks will still communicate to shape market expectations even without explicit guidance.