Today’s announcement that the FOMC will publish interest rate forecasts from its January meeting is a small surprise. It seemed unlikely there would be time to settle anything at the December meeting; on the other hand, the minutes before a two-day meeting were always a likely time to announce such a move, because it give markets time to prepare for what they’re getting in a few weeks time.
The December minutes are full of clues on the trade-offs that the Fed made in its decision.
(1) The FOMC decided on publishing the existing forecasts of “appropriate” monetary policy made by each committee member. This is not as simple as it seems and was clearly the subject of some debate.
Lars Nyberg, deputy governor of Sweden’s Riksbank up until the turn of the year, has decried an IMF-led eurozone bail-out as absurd and lambasted the call for private sector involvement in the Greek debt crisis as having done irreparable harm.
The European Central Bank wouldn’t object – it too hasn’t liked either idea. But Frankfurt will be less pleased at Mr Nyberg’s calls to step into the breach.