Word Count Of Federal Open Market Committee Press Release Statements*
In response to almost every situation, a beloved colleague is fond of saying, “Less is more.” Newly minted Fed Chair Kevin Warsh seems to have embraced a similar mantra. The June FOMC meeting statement featured just 114 words, down from 244 in the April statement and closer in length to statements during the Greenspan regime. The shift could presage a style that elevates brevity, reduces the frequency of Fed communication, and the information available. But we’ll have to see. Aside from taking a red pen to the statement, Warsh announced five “task forces” to study Fed communication and other topics before recommending changes. Zooming out, the trend of loquaciousness peaked between Bernanke and Yellen at the Fed. But that talkative Fed may have been a victim of circumstance. At that time, the fed funds rate was stuck at zero, with the economy in a low gear and inflation sub-target: talking was a tool. Today, the economy is resilient, and inflation is sticky. Does the Fed need to do less spoon-feeding—and should we expect more volatility in markets as a result?
