Forward Guidance

Forward guidance means statements from a company or central bank about what it expects or plans for the future. In simple terms, forward guidance helps markets understand what may happen next. Forward guidance is important because investors make decisions based on expectations. A company may give forward guidance about revenue or profit, while a central bank may give forward guidance about interest rates. For example, if the Fed says rates may stay high for longer, that is a type of forward guidance. Forward guidance is not a promise. It can change if economic data, inflation, demand, or financial conditions change.