Mester Says Fed Can Better Explain Officials’ Economic Views (1)

Federal Reserve Bank of Cleveland President Loretta Mester said the US central bank should consider ways to better communicate to the public how economic conditions will affect future policy decisions.

Speaking in Tokyo on Tuesday, Mester recommended two key changes: adding more words to the Fed’s post-meeting policy statement – to describe how officials assess economic developments and potential risks to the outlook – and more detail to its quarterly summary of policymakers’ economic forecasts.

Cleveland Fed President Loretta Mester

Photographer: Melissa Lyttle/Bloomberg

“Enhancements to communications would make monetary policy more effective in normal times and also improve the effectiveness of nonconventional policy tools, such as ...