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How Transparency Transformed the Fed

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Some of the most anticipated events in the financial world are the 8 meetings that the US Federal Reserve has to form monetary policy that affects the economies of the world. The press releases are widely read by just about every member of the finance industry and beyond. The transparency of the Fed wasn't always the norm and has caused FOMC participants to be more wary with their commentary.

The talkative Fed wasn't a phenomenon until Alan Greenspan's tenure during the 1990s. During his time, press conferences and economic indicator estimates were released, and in 1993, it was decided that FOMC private meeting notes would be released with a five-year lag. The change in the publicity of the FOMC minutes has allowed for a comparison to be made between commentary that was given with the knowledge it is going public and without. The Central Bank of Sweden used the FOMC minutes to analyze the tone and informativeness of the commentators in FOMC minutes between 1993-2012 in a w…