William Safire’s On Language column called Glutmanship [NYT Mag] this week addressed the language of the Fed (if I only paid attention in my English classes…)
Consider your reaction if I whispered to you, “The Fed is likely to raise interest rates by 25 basis points!” Scary, no? But what if I said, “Looks as if Ben Bernanke and the boys are going for another quarter-percent rise in rates.” You would yawn; been there, done that.
Some samples of Fedspeak:
inverted yield curve
the global saving glut
an accommodative policy
increases in resource utilization
Here’s what the Fed does [Fed].
Why not speak directly? According to Greg Ip, a WSJ reporter that covers the Fed:
The reason is that the Fed prizes flexibility. If it were too explicit in describing what it planned to do, it would be harder to do something different in the event the economy behaved unexpectedly.. . .Thus even as it communicates more, it prefers to do so in Fedspeak.”
Actually it sounds just like my kids when they are describing how much homework they have to do that evening, leaving options open in case there is something is good on tv.
Tags: Ben Bernanke