Since the 2008 financial crisis, the Federal Reserve has made significant strides toward transparency and increasing communication with the public.
Experts say the Fed needs to share a wider range of risks, possible scenarios and policy responses to reduce"surprises" that can cause outsized market reactions. Economists remain divided on how many rate cuts to expect from the Fed in 2024, despite what Wall Street saw as dovish signals from Fed Chair Jerome Powell in his latest press conference and the Federal Open Market Committee's most recent statement.
Levin, who was a special communications and monetary policy adviser to former Fed Chair Ben Bernanke, says dissenting views among policymakers are increasingly rare, and instead of presenting a variety of outcomes and risks, the Fed emphasizes baseline cases. And given the Fed's"data-dependent" approach, the baseline can change rapidly as new economic reports are released.
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