The U.S. Federal Reserve provided an update on its internal deliberations on improving communications in a semi-annual report to Congress on Wednesday.
Fed Chairman Ben Bernanke has appointed a subcommittee to improve central bank communications with the market and the public, and the Fed's rate-setting committee has been discussing the issue at its meetings during the year.
Following are some of the most significant strides toward greater openness the Fed has taken since 1994:
February 1994 -- The policy-setting Federal Open Market Committee begins to release statements announcing interest-rate moves. However, it would remain silent after meetings in which rates were held steady.
February 1995 -- FOMC decides to issue "lightly edited" verbatim transcripts of deliberations with a five-year lag. It also decides to make permanent the policy established a year earlier of announcing interest-rate moves.
August 1997 -- Fed publicly acknowledges policy is formulated in terms of a target for the federal funds rate. FOMC begins to put a number on the intended fed funds rate in its policy-implementing directive to the New York Fed.
December 1998 -- FOMC adopts policy of immediately announcing shifts in bias when it wants to communicate a major shift in its views of the balance of risks or likely direction of policy. The decision was disclosed with the release of meetings of the December FOMC meeting in February 1999. The first announced bias shift was in May 1999. It has issued a statement after every meeting since then, whether or not it has changed rates or shifted its bias.
December 1999 -- FOMC adopts new procedure on issuing assessments of balance of economic risks, instead of policy bias. The Fed announced the decision in January 2000. The statement issued after the February 2000 FOMC meeting was the first with the new balance of risks language.
March 2002 -- FOMC adopted policy to announce roll call on votes, including whether there were any dissenting voices. Previously the roll call vote was disclosed only when the minutes of the meeting were released.
August 2003 -- FOMC begins to incorporate forward-looking language on its policy path, saying it believed policy accommodation could be maintained for "a considerable period."
January 2004 -- FOMC begins to say it could "be patient" removing policy accommodation. In May 2004, it started to say accommodation could likely be removed at a "measured" pace and in December 2005 the FOMC said "some further measured policy firming is likely," a signal that the rate-rise campaign begun in June 2004 was likely nearing an end.
July 2004 -- The Fed begins to provide a forecast for core inflation, as opposed to overall inflation, in its semiannual monetary policy reports to Congress. Fed officials generally focus more heavily on core inflation measures in their policy-making deliberations.
December 2004 -- FOMC decides to accelerate the release of minutes of its meetings by making them public three weeks after each gathering as opposed to after the subsequent meeting, a lag of about six weeks.
February 2005 -- For the first time in its February monetary policy report to Congress, the Fed provides two-year forecasts from policy-makers for GDP, inflation and the unemployment rate. Previously, the February report contained only forecasts for the current year, with the July report offering forecasts for both the current and coming years. Some analysts viewed the incorporation of two-year inflation forecasts as a step toward inflation targeting.
May 2006 -- The FOMC meeting minutes reveal Bernanke appointed Fed Vice Chairman Donald Kohn to head a subcommittee on communications. The panel will include Federal Reserve Bank of San Francisco President Janet Yellen and Minneapolis Fed Bank President Gary Stern.
July 2006 -- The Fed announces it will expand its October FOMC meeting to two days to allow time for discussion of communication issues. It also said it will increase the number of two-day meetings to four from two in 2007 to allow more in-depth discussion of economic issues.
October 2006 - The FOMC discusses the advantages and disadvantages of using a numerical inflation objective. But it says the topic requires further discussion.
January 2006 - FOMC discusses the role of economic projections, and agreed to explore whether changes to current practices might facilitate improved communication, according to minutes of its meeting.
March 2006 - FOMC discusses possible advantages and disadvantages of specifying a numerical price objective for monetary policy, according to minutes of its meeting.
May 2006 - FOMC briefly discusses next steps in its review of communications issues and agrees to consider them at the next meeting on June 27-28, according to minutes of the meeting.
July 2007 - The Fed says in its semi-annual report to Congress that during the first half of 2007, the FOMC also discussed the appropriate role of meeting minutes and policy statements, in addition to discussions about economic projections and a numerical price objective.