The U.S. Federal Reserve’s meeting minutes provide some assurances about future policy but do not necessarily improve the Fed’s predictability, a study published by the European Central Bank showed on Wednesday.
Although the Fed has been publishing minutes since 1993, the ECB only started last year, providing a less detailed account of its discussions.
The study looked specifically at the Fed. Its author Alexander Jung wrote: “In terms of policy implications, the present analysis is consistent with the view that the practice of publishing timely minutes is a useful tool for central banks to enhance their transparency but the disclosure of confidential information by means of meeting minutes does not always help to improve central bank predictability.”
“While transparency about the internal deliberations tends to provide markets with additional assurance about the future policy course, … markets normally obtained enough clues about forthcoming fed funds rate changes from the Fed’s other communications,” Jung said in a paper that does not necessarily represent the ECB’s opinion.
Central banks follow widely differing practices in publishing minutes. Some use them to guide markets in the interlude between meetings, while others provide only a simple summary of discussions.
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