Fed Chairman Ben Bernanke introduced a new communication strategy Wednesday, which will give the public more information about the Fed's outlook on the economy. At a time of uncertainty, the Fed plans to start releasing projections for inflation-adjusted GDP, unemployment, and inflation four times a year. The new plan should "provide a more-timely insight into the [Federal Open Market Committee's] outlook, will help households and businesses better understand and anticipate how our policy decisions respond to incoming information, and will enhance our accountability," Bernanke explained. Before today, these projections were only released twice a year, in February and July. Bernanke also said the Fed will extend its forecast horizon an extra year to three years. The new version of these forecasts will include a "narrative" that will summarize "participants' views of the major forces shaping the outlook, discusses the sources of risk to that outlook, and describes the dispersion of views among policymakers," the Chairman said. The Fed will still release reports to Congress in February and July, but will now release two extra reports with Fed minutes at the beginning of the second and fourth quarters. The new strategy will still not give numeric targets for inflation, a practice done at other central banks. It will however offer forecasts for core inflation, which it had not before. The Fed will kick-off this new strategy on Tuesday, when it releases the minutes from the Oct. 30-31 FOMC meeting.
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