The Sound of Silence

A lesson from art criticism offers some hope for understanding the Federal Reserve’s (Fed) communications; (and at this point any hospitable quarter of comparison is welcome). Spoiler alert: we will go from here, to a movie, and end with a song for help. But back to the lesson. When pondering a work of art, the relatively empty spaces in a crowded picture often command the most attention.

Once viewed as a secretive place, the Fed now unmoors boatloads of information about the outlook for the economy and monetary policy almost as frequently as a Staten Island Ferry leaves the terminal. The Fed Board of Governors’ website lists 53 speeches, testimonies, and other remarks by senior officials thus far in 2019. Each of the four meetings of the Federal Open Market Committee (FOMC) are accompanied by the release of a statement from the group, an implementation note by the staff, opening remarks by Chair Powell for his after-the-meeting press conference, and subsequently a transcript of his exchange with reporters. Not counted are informal panel remarks and media interviews, nor what is said on the margins of The Fed Listens, a feel-good national tour of monetary-policymaking empathy, perhaps showing at a nearby venue.