(January 20 – 15:40 ET) – All the market attention focused on the “bias” portion of its rate announcements has convinced the U.S. Federal Reserve Board to change its methods.

From now on it will release a statement after every Federal Open Market Committee meeting. Previously it only did so when it moved rates or there was a “major shift in the Committee’s view about prospective developments”.

It will do away with the “bias” terminology that caused so much huffing and puffing among rate watchers. The bias was intended to signal the Fed’s attitude concerning the period between FOMC meetings. From now on it will look beyond the next meeting and it will “describe the FOMC’s consensus about the balance of risks to the attainment of its long-run goals of price stability and sustainable economic growth”.

These changes were proposed in August and approved at the Fed’s December 21 meeting. They take effect as of the February FOMC meeting.
-IE Staff