The Fed Wants More Power
The Federal Reserve is preparing to open its kimono a bit wider in order to offer more information to investors, in an effort "to magnify the power of those actions by shaping the expectations of investors," The New York Times explains. Reporting on some details from an internal meeting in December that were made public on Tuesday afternoon, Benyamin Appelbaum offers the broad strokes of the Fed's plans "to publish a forecast of its own actions:"
The change in communications policy is part of a broader effort by the Fed’s chairman, Ben S. Bernanke, to improve public understanding of the central bank’s goals and methodology. …The Fed said that it would now publish information about the expectations held by members of that committee for the future path of monetary policy over the current year and the following two years. The first forecast will extend through 2014.
The forecast will be included in an existing set of predictions about future economic conditions that the Fed already publishes four times a year.
The Fed's new approach shouldn't change too much for the average American. But the notion that Fed chairman Ben Bernanke and friends are making any kinds of moves to "magnify the power" is certainly going to trouble folks who don't even think the bank should exist. Ron Paul, for example.
