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Document of the Day. The results of a survey conducted on behalf of the Board of Governors of the Federal Reserve System have been reported in the news recently.
- Survey of Household Economics and Decisionmaking
- Federal Reserve Board issues Report on the Economic Well-Being of U.S. Households FRB: Press Release (May 27, 2015).
- Report on the Economic Well-Being of U.S. Households in 2014 [Full Report. PDF. 108 pp] Board Of Governors Of The Federal Reserve System (May 2015)
Some of the findings of the report include:
- Only 53 percent of respondents indicate that they could cover a hypothetical emergency expense costing $400 without selling something or borrowing money.
- 23 percent of the adult population has some form of education debt.
- 31 percent of non-retirees have no retirement savings or pension. Among lower-income respondents, 55 percent plan to keep working as long as possible or never plan to retire.
Today the Board of Governors of the Federal Reserve System released transcripts of eight scheduled meetings and six emergency sessions of its Federal Open Market Committee during the 2008 financial crisis. (The Fed delays release of such transcripts for five years.)
- FOMC: Transcripts and Other Historical Materials, 2008, Federal Open Market Committee.
- A Chronicle of Uncertainty, Then Bold Action, in 2008 Fed Transcripts, By Binyamin Appelbaum, New York Times (Feb. 21, 2014).
The transcripts show that the Fed’s initial response to the crisis was constrained by a lack of understanding about the depth of the problems, and a deeply ingrained bias to worry more about the risk of inflation than the reality of rising unemployment. But it also shows that Fed officials responded decisively once the crisis was upon them, perhaps preventing an even deeper recession.
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.