Revealing Interest Rate Forecasts Advances Bernanke’s Transparency Drive- Bloomberg
Federal Reserve Chairman Ben S. Bernanke is betting that announcing Federal Reserve officials’ own forecasts for borrowing costs will make monetary policy more effective while also supporting the two-year expansion.
A decision to reveal forecasts for the federal funds rate starting this month represents the biggest step toward openness since Bernanke took office in 2006 promising greater transparency, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. and a former Fed board economist. The central bank didn’t even start announcing changes in interest rates until 1994.
“This is a complete 180-degree shift from the old mysterious-institution approach,” said Ethan Harris , co-head of global economic research at Bank of America Merrill Lynch in New York. “There’s been a steady move toward opening up the central bank to outside scrutiny and trying to explain to the public the logic of what they’re doing.
It’s a lot easier to allege conspiracy than it is to offer constructive criticism of macro-economic monetary policy…hence the current state of affairs….where direct moves to more openness like this one will be ignored by those who have yet to crack open a textbook on the subject.