Lane says reaction-function guidance works better than rate-path promises away from the lower bound
• Decisions remain data-dependent, meeting by meeting; criteria include inflation outlook, underlying inflation, transmission and—since July 2025—risks
• Communication moves rates across maturities on meeting days and between meetings
• Communication shocks affect activity and inflation, with smaller, slower effects than rate shocks
• LLM-based analysis tracks hawkish and dovish tone; validation remains essential