While much is made about differing opinions of Federal Open market Committee members, the five-paragraph statement describing its long-run framework that the panel released in January shows that the FOMC has common goals, Federal Reserve Bank of Minneapolis president Narayana Kocherlakota said Wednesday.
“Press reports on the FOMC often highlight apparent differences of opinion on policy among meeting participants. In contrast, the framework statement that we released in January is important because it details the common principles regarding goals and strategy that shape FOMC decision-making,” he told the Business Law Institute, according to prepared text of his speech released by the Fed.
The framework statement “does not represent any change in the committee’s approach to policy, but it does represent a major step forward in the committee’s communication of that approach to the public,” Kocherlakota said.
“In particular, I think of this statement as providing the basic principles of how the committee implements its statutory dual mandate that monetary policy should promote price stability and maximum employment.”
Despite the improvements in communication, he said, “there is still more that can be done.” He added that he has discussed that in previous speeches.