Fed Statements Not as Simple as Presidential Debates, Evans Says

  • Central bank communications usually at graduate school level
  • Federal Reserve Bank of Chicago President speaks in Frankfurt

Central bank communications are actually quite simple, but not as simple as U.S. presidential debates, according to Federal Reserve Bank of Chicago President Charles Evans.

Speaking at the European Central Bank conference in Frankfurt on Tuesday on how policy makers connect with their audience, Evans said:

“Somebody did a linguistic study of the reading level of our FOMC statements and it’s about a first-year graduate school level, which I personally find difficult to believe -- it doesn’t seem quite that complicated. But it’s not the eighth-grade level that our presidential candidates conduct their debates with.”

Similar studies have been done at the Bank of England, where Chief Economist Andy Haldane has pointed out that communications are at a grade 14 level, compared to a grade eight or nine level that provides a good starting point for wider audiences.

Even though they can be complex, Evans said the Fed is “well-served” by its communications and that shortening them would likely spark complaints.

“Our statements are, I would say, modestly detailed,” he said. “We have to make a judgment, decide what we are trying to accomplish, how policy requires the public and markets to understand what we’re doing, and sort of let that run.”

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