The Federal Reserve has come under attack in recent weeks, not for what it is doing (nothing) but for what it is saying (a lot). To hear journalists tell it, the Fed’s “communication problem” is a reflection of too many policy makers saying too much about too little, confusing everyone in the process. In the last two decades, the Fed has evolved from an institution that guarded its policy actions, both actual and prospective, to one committed to absolute transparency. Forward guidance was elevated to a policy tool to insulate financial markets from the slightest surprise. How’s that working out? There is an inherent ... (full story)