Columbia International Affairs Online: Policy Briefs

CIAO DATE: 02/2012

The Fed moves to provide more transparency

January 2012

Oxford Economics

Abstract

The Federal Reserve has taken additional actions to make its monetary policy more transparent to markets. The latest moves include the release of FOMC members’ expectatins for the federal funds rate at the end of each of the next few years and in the longer term. Another is an statement of strategy for meeting its dual mandates of price stability and full employment. Although the statement included an explicit target for inflation but not for unemployment, the equal weights given to each goal afford the Fed more discretion in setting monetary policy.