Fedspeak

In monetary policy of the United States, the term Fedspeak (also known as Greenspeak) is what Alan Blinder called "a turgid dialect of English" used by Federal Reserve Board chairs in making wordy, vague, and ambiguous statements.

"[7] Chairman Ben Bernanke and Chairwoman Yellen have effected a major change in Fed communication policy departing from the obfuscation that characterized the previous three decades.

The notion of fed speak originated from the fact that financial markets placed a heavy value on the statements made by Federal Reserve governors, which could in turn lead to a self-fulfilling prophecy.

[11] Though previous "Fed" chairmen Arthur Burns and Paul Volcker were known for blowing smoke, both literally and figuratively, when appearing before Congress, Alan Greenspan is credited with making Fedspeak a "high-art".

[5] Although it was originally believed by some that Alan Greenspan, who is generally credited for popularizing Fedspeak, may have used such language unintentionally, he revealed in his 2007 book The Age of Turbulence, that the method of avoiding the issues directly when a clear message was not desired was indeed intentional.

[16] In an interview with BusinessWeek in August 2012, when asked "about practicing the art of constructive ambiguity", Greenspan replied: As Fed chairman, every time I expressed a view, I added or subtracted 10 basis points from the credit market.

[18] The members of the Board of Governors and the Reserve Bank presidents foresee an implicit strengthening of activity after the current rebalancing is over, although the central tendency of their individual forecasts for real GDP still shows a substantial slowdown, on balance, for the year as a whole.Risk takers have been encouraged by a perceived increase in economic stability to reach out to more distant time horizons.

But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?I would generally expect that today in Washington DC the probability of changes in the weather is highly uncertain, but we are monitoring the data in such a way that we will be able to update people on changes that are important.In the 2010s, the Federal Reserve Open Market rate-setting committee (FOMC) began publishing dot plots to tabulate all individual committee member projections of target interest rates in a single graphic.

[8] In 2016, the president of the St. Louis Fed James Bullard began a movement away from the dot plot exercise, citing a gap of opinion between market economists and FOMC members.

[23] As of 2018[update], the FOMC has continued to publish dot plots in its economic projections, detailing the variety of opinions of the committee members for the "appropriate target range for the federal funds rate" in future years.