FOMC tests New System

April 29th, 2015 8:50 pm | by John Jansen |

Market participants have taken the position that the FOMC can only implement major policy changes in the months when Ms Yellen engages in genial colloquy with the press. The WSJ’s Pedro Da Costa reports that the Fed tested a teleconference system which would permit Ms Yellen to hold an impromptu press conference which would be broadcast on the internet.

That would free the FOMC to make major policy changes at any meeting rather than the quarterly schedule participants erroneously assume.

Via Pedro Da Costa at the WSJ:

The Federal Reserve on Wednesday held a phone call with members of the press aimed at testing a teleconferencing system that would be used if Fed Chairwoman Janet Yellen decided to hold an impromptu press briefing, such as following a policy meeting with no scheduled media gathering.

Investors have largely come to expect the Fed will only make major policy changes at its quarterly meetings that are followed by press conferences with Ms. Yellen, who uses the briefings to explain the actions in detail. She has emphasized that every Fed policy meeting is “live,” meaning the central bank could take action. The test on Wednesday was aimed at ensuring the technology would work.

“We are testing those technical capabilities with today’s call,” said Michelle Smith, a Fed spokeswoman. “This test is not signaling any planned future [Fed] action.”

The call “would likely be broadcast live on the board’s website,” Ms. Smith said. That would mean members of the public could listen to the call.

The Fed on Wednesday left short-term interest rates near zero and downgraded its assessment of the economy.

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