Chairman Ben S. Bernanke will hold press briefings four times per year to present the Federal Open Market Committee's current economic projections and to provide additional context for the FOMC's policy decisions.Wow. It wasn't too long ago that I remember watching one of Bank of England Governor Mervyn King's press conferences and thinking "that will never happen here."
In 2011, the Chairman's press briefings will be held at 2:15 p.m. following FOMC decisions scheduled on April 27, June 22 and November 2. The briefings will be broadcast live on the Federal Reserve's website. For these meetings, the FOMC statement is expected to be released at around 12:30 p.m., one hour and forty-five minutes earlier than for other FOMC meetings.
The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication. The Federal Reserve will continue to review its communications practices in the interest of ensuring accountability and increasing public understanding.
This is another step that follows from a significant evolution in what is seen as good practice by central banks. The Fed and other central banks once believed in the importance of using secrecy to cultivate a mystique. It was not for nothing that William Grieder titled his 1987 classic about the Fed "Secrets of the Temple." The Fed only began announcing changes in its policy stance in 1994, announcements of explicit Fed Funds rate targets followed in 1995.
This trend towards openness partly reflects the influence of academic views, as modern macroeconomic models assign important roles to expectations, information and credibility (which can be cultivated by making policy announcements and then sticking to them). Its not surprising to see Bernanke pushing in this direction, given his background as a prominent academic economist (in contrast to his predecessor). The previous procedural step in this direction was in November 2007, when Bernanke instituted the practice of having the FOMC members release their forecasts. Bernanke also appeared on 60 minutes last December, which would have been unthinkable to the previous generation of central bankers.
Update: Real Time Economics has reaction from some Fed watchers and a chronology of the Fed's increasing openness.