policy constraint. By improving the clarity of the central bank communication, Delphic guidance is intended to increase the predictability of monetary policy and make it more effective Odyssean guidance, in contrast, is most likely to be relevant when the policy rate is at or close to the ZlB, so that the scope for short-term rate cuts is limited. Typically, monetary policymakers use Odyssean guidance to communicate a promise to keep rates lower for longer than implied by their"normal"reaction function. If the promise is credible, then market participants should bid down longer-term yields and bid up asset prices today, effectively adding stimulus despite the ZlB constraint. The key word here is"commitment. "If prior commItment were impossible, for the reasons explored in the time-consistency literature( Kydland and Prescott, 1977), then Odyssean forward guidance could not materially change market expectations and would consequently be useless. In practice, central bank guidance does appear to have significant effects on asset prices(Campbell et al., 2012; Swanson, 2017)and thus, presumably, on the economy. Central bankers concerns for their own reputations and those of their institutions, as well as the tendency of market participants to look for focal points around which expectations can coalesce, appear in practice to provide monetary policymakers some ability to commit to future policy actions The Federal Open Market Committee(FOMC), the Fed's policymaking body, provided regular forward guidance during the recovery from the crisis. Some controversy has arisen about the FOMC's approach. Michael Woodford (2009)and others have argued that the FOMC inappropriately used Delphic rather than Odyssean formulations in its guidance, limiting its enefit. For example, at the same meeting at which the policy rate was cut effectively to zero the december 2008 FOMC statement indicated, ". the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time"(FOMC, 2008 ). By speaking of anticipating" or"expecting " rates to remain low, rather than using stronger language of commitment or intention, Woodford argues, the FOMC created less stimulus than it might have. Indeed, by signaling pessimism about the outlook, the FOMC's guidance(in Woodfords view)might have been counterproductive Woodford is right in principle, and all else equal, a policy committee whose intent is to provide odyssean guidance should try to make its commitments as clear and as nearly ironclad as possible. A real-world complication is that policy committees are not typically unitary actors but may include participants of diverse views, trying to reach compromise in an uncertain6 policy constraint. By improving the clarity of the central bank communication, Delphic guidance is intended to increase the predictability of monetary policy and make it more effective. Odyssean guidance, in contrast, is most likely to be relevant when the policy rate is at or close to the ZLB, so that the scope for short-term rate cuts is limited. Typically, monetary policymakers use Odyssean guidance to communicate a promise to keep rates lower for longer than implied by their “normal” reaction function. If the promise is credible, then market participants should bid down longer-term yields and bid up asset prices today, effectively adding stimulus despite the ZLB constraint. The key word here is “commitment.” If prior commitment were impossible, for the reasons explored in the time-consistency literature (Kydland and Prescott, 1977), then Odyssean forward guidance could not materially change market expectations and would consequently be useless. In practice, central bank guidance does appear to have significant effects on asset prices (Campbell et al., 2012; Swanson, 2017) and thus, presumably, on the economy. Central bankers’ concerns for their own reputations and those of their institutions, as well as the tendency of market participants to look for focal points around which expectations can coalesce, appear in practice to provide monetary policymakers some ability to commit to future policy actions. The Federal Open Market Committee (FOMC), the Fed’s policymaking body, provided regular forward guidance during the recovery from the crisis. Some controversy has arisen about the FOMC’s approach. Michael Woodford (2009) and others have argued that the FOMC inappropriately used Delphic rather than Odyssean formulations in its guidance, limiting its benefit. For example, at the same meeting at which the policy rate was cut effectively to zero, the December 2008 FOMC statement indicated, “…the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time” (FOMC, 2008). By speaking of “anticipating” or “expecting” rates to remain low, rather than using stronger language of commitment or intention, Woodford argues, the FOMC created less stimulus than it might have. Indeed, by signaling pessimism about the outlook, the FOMC’s guidance (in Woodford’s view) might have been counterproductive. Woodford is right in principle, and all else equal, a policy committee whose intent is to provide Odyssean guidance should try to make its commitments as clear and as nearly ironclad as possible. A real-world complication is that policy committees are not typically unitary actors, but may include participants of diverse views, trying to reach compromise in an uncertain