What is ‘Fed Speak’
A phrase used to describe former Federal Reserve Board Chairman Alan Greenspan’s tendency to make wordy statements with little substance. Many analysts felt that Greenspan’s ambiguous “Fed speak” was an intentional strategy used to prevent the markets from overreacting to his remarks.
Explaining ‘Fed Speak’
Greenspan, who was chairman of the Fed from 1986 to 2006, was known for making vague statements that were not easily interpreted. For example, following a speech Greenspan gave in 1995, a headline in the New York Times read, “Doubts Voiced by Greenspan on a Rate Cut,” while the Washington Post’s headline that day said “Greenspan Hints Fed May Cut Interest Rates”. Greenspan’s successor, Ben Bernanke, is known for making more direct statements.
Further Reading
- Fed speak on main street: Central bank communication and household expectations – www.sciencedirect.com [PDF]
- Deciphering Fedspeak: The information content of FOMC meetings – papers.ssrn.com [PDF]
- When the Fed speaks: Arguments, emotions, and the microfoundations of institutions – journals.sagepub.com [PDF]
- The economics of the Fed put – www.nber.org [PDF]
- Fedspeak: Who moves US asset prices? – www.ijcb.org [PDF]
- The fed and interest rates-a high-frequency identification – pubs.aeaweb.org [PDF]
- Seeing like the Fed: Culture, cognition, and framing in the failure to anticipate the financial crisis of 2008 – journals.sagepub.com [PDF]
