The U.S. Federal Reserve used to be a black box. Big banks employed full-time Fed watchers to study the money markets and guess what the institution was up to. When Janet Yellen was appointed a Fed governor in 1994, it was just six months after the central bank had published for the first time a statement to announce that it had adjusted benchmark interest rates.
How much has changed. The central bank now explains its every move and even discusses decisions to not move. It outlines its view of the future and says what it might do next. The Fed’s pledge to keep rates near zero through 2014 shows how communications and policy actions have melded as Chairman Ben S. Bernanke searches for tools to support a sputtering recovery with no further fiscal help from Congress.
