US Federal Reserve officials must carefully watch every word they say
- America has seen Fedspeak reach a level so high that it risks the functioning of markets, allocation of capital and stability of the financial system. Fed cred matters for the central bank’s own autonomy.
There was a time not so long ago when the US Federal Reserve said very little about its policies; its leaders did their utmost to obfuscate rather than clarify. Those days are long gone. Today, we are flooded with ‘Fedspeak.’ Last week, 11 top Fed officials made 20 speeches. No wonder concerns are rising about the risk posed by over-communication to the well-functioning of financial markets, efficiency of the economy’s resource allocation and overall stability of the global system.