WASHINGTON The Federal Reserve has come a long way in how it communicates but could further enhance understanding of its policy actions by going to the trouble of publishing a policy bulletin every three months, a top U.S. central banker said on Monday.
"A quarterly monetary policy report could potentially provide a more complete discussion of the state of the U.S. economy and the likely direction going forward," wrote St. Louis Fed President James Bullard.
The Fed currently holds quarterly press conferences with Chairman Ben Bernanke, alongside publication of a summary of economic projections of the 19 policy-makers who attend the regular meetings of its Federal Open Market Committee (FOMC).
The idea of a quarterly bulletin, which other central banks including the Bank of England already issue, has been discussed internally at the Fed for a while.
It had seemed to have drifted to the back burner after work looking into the adoption of a Fed consensus forecast for economic projections - which would form the baseline of such a report - highlighted a number of pitfalls, including how to reconcile disparate views on growth among Fed policymakers.
Bullard, who is a voting member of the policy-setting committee this year, made plain that he at least continued to think that the topic was worth pursuing.
"The main benefit of a quarterly monetary policy report could be improved communication with financial markets and the American public about how the FOMC views the key issues facing the U.S. economy," he wrote in the St. Louis Fed's April edition of its 'Regional Economist' publication.
Getting around the problem of how to forge a consensus forecast among 19 policymakers, he suggested Fed Board staff construct the economic projection that would form the basis for the report, under the guidance of the chairman.
"Given that the chairman typically stays in the middle of the Committee, the natural outcome would be a forecast that is not too different from the central tendency of the FOMC."
Bernanke's precise view of the outlook for the U.S. economy is generally kept from view during his public remarks, when he speaks on behalf of the committee.
(Reporting By Alister Bull; editing by Andrew Hay)