Fedspeak

One more thought about today’s FOMC statement: at a certain point, one starts to wonder why the FOMC can’t just use plain English when trying to convey its intentions. Currently, economists and financial market participants spend considerable time and energy trying to interpret exactly what the FOMC is signaling with its statements. So why can’t they just come right out and tell us? What would be the harm if the statement read something like this:

“We fully expect to continue our current policy of raising interest rates by 0.25% per meeting for at least the next two or three meetings. And if economic growth continues at current levels, we’ll continue this policy at least through the end of the year. Note, however, that this could change if there are dramatic changes in economic conditions. Obviously.”

The Fed has gradually moved toward greater and greater transparency. Wouldn’t plain English be another good step in that direction?

Kash