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The Federal Reserve has released transcripts of meetings of the Federal Open Market Committee from 2006, after a standard five-year delay.
As the New York Times notes, the transcripts…
… clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.
- Inside the Fed in 2006: A Coming Crisis, and Banter, By Binyamin Appelbaum, New York Times (January 12, 2012).
For a famously private institution known for its cryptic, formulaic statements, the meeting transcripts offer a rare glimpse of senior officials in relatively unguarded conversation, somewhat akin to the tapes that some presidents have made in the Oval Office. The Fed officials exchange jokes, gossip about people who are not present, and speak much more frankly about the economy and policy than they did in the public remarks that they made contemporaneously.
The results are unlikely to burnish any of their reputations, inasmuch as they could not see the widening cracks beneath their feet.
The Federal Open Market Committee (FOMC) is responsible for “open market operations” — purchases and sales of U.S. Treasury and federal agency securities. These are the Federal Reserve’s principal tools for implementing monetary policy. “Monetary policy” refers to actions undertaken by the Federal Reserve to influence the availability and cost of money and credit to help promote national economic goals. The FOMC consists of twelve members: seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.
The most detailed record of FOMC meeting proceedings is the transcript. Beginning with the 1994 meetings, the FOMC Secretariat has produced the transcripts shortly after each meeting from an audio recording of the proceedings, lightly editing the speakers’ original words, where necessary, to facilitate the reader’s understanding. Meeting participants are given an opportunity within the subsequent several weeks to review the transcript for accuracy.
Transcripts of FOMC meetings are made available to the public with about a five-year lag.