The initial analysis regarding U.S. Federal Reserve Chairman Ben Bernanke's major changes to the Fed's communication strategy is that the changes, via increased information, will enhance the market's ability to identify and analyze Fed policy.
Bernanke, who announced the changes during a speech Wednesday, said the Fed will now:
Bernanke, who announced the changes during a speech Wednesday, said the Fed will now:
- publish economic forecasts quarterly, up from semi-annually. (These reports will include forecasts for economic growth, unemployment and inflation.)
- publish a 3-year horizon analysis, up from a 2-year analysis, and this section will also include "a narrative" that summarizes the views shaping the outlook, as well as the breadth of views among Fed governors.
- publish a price gauge prediction for headline inflation (which includes food and energy costs), as well as a prediction for core inflation.
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