The publication of medium-term forecasts does not raise nearly the same difficult political and communication issues that quantification of price stability may, in my view, and so I propose it here as a more feasible short-term step. The FOMC already releases (and has released since 1979) a range and a "central tendency" of its projections for nominal GDP growth, real GDP growth, PCE inflation, and the civilian unemployment rate twice each year, publishing them as part of the semiannual Monetary Policy Report to the Congress. These projections are actually quite interesting, as they represent the views of Fed policymakers of the future evolution of the economy, conditional on what each policymaker views as the best path for future policy. Two drawbacks of these projections as they now stand are that (1) they are sometimes not released for a number of weeks (the time between the FOMC meeting at which they are assembled and the Chairman's testimony to the Congress), and (2) the January projections cover only the remainder of the current year (the July projections cover the remainder of the current year and all of the subsequent year).
I think it would be very useful to detach these projections from the Monetary Policy Report and instead release them shortly after the meetings (in January and July) at which they are compiled. I would also suggest adding a second year of forecast to the January projection, to make it more parallel to the July projection as well as to the forecasts in the staff-prepared Greenbook. By releasing the projections in a more timely manner, and by adding a year to the January projection, the FOMC could provide quite useful information to the public. In particular, the FOMC projections would convey the policymakers' sense of the medium-term evolution of the economy, providing insight into both the Fed's diagnosis of economic conditions and its policy objectives. Ideally, the release of these projections also would provide occasions for Governors and regional Bank Presidents, drawing on the expertise of their respective staffs, to convey their individual views on the prospects for the economy and the objectives of monetary policy.