In its ongoing efforts to improve the clarity and transparency of monetary policy, the Federal Reserve has ramped up how much it reveals to the world.
In recent years, the Fed tweaked its communications policy so that we now regularly get a Summary of Economic Projections, which includes Fed members’ forecasts for interest rates. Periodically, the Fed follows up the release of its Federal Open Market Committee (FOMC) statement with a press conference, which includes a Q&A session.
Unfortunately, it’s hard to say that traders, investors, and even Fed-experts have a better sense of what the Fed is actually thinking.
Maybe they’re actually saying too much.
Deutsche Bank economist Torsten Slok circulated this chart of the number of words in each FOMC statement. Today’s FOMC statement broke the all-time record.