Fed to hold regular press briefings

WASHINGTON: For the first time in history the US Federal Reserve plans to hold regular press briefings, the central bank said on Thursday, and a major policy shift for the publicity-shy institution. The briefings, which will take place four times a year, beginning on April 27, will move the Fed into line with other leading central banks. While Fed chairmen have occasionally given interviews and spoken to journalists off the record, formal press conferences by a sitting chairman are a rarity. Just decades ago, they would not even inform the public about interest rate  decisions, any central bank's main policy tool.

"The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication," the bank said. Since coming to office in 2006, Chairman Ben Bernanke has moved to shine more light on the Fed's decision-making, after harsh criticism of the bank's policies. During the financial crisis Bernanke appeared with then-Treasury secretary Hank Paulson to explain how they proposed to rescue the US banking system, but by-and-large the Fed has stuck to carefully crafted speeches and meeting statements to get its point across. Bernanke held a heavily moderated question-and-answer session in February, in what now appears to have been a trial balloon for the new policy. Experts say the move has significant policy implications for the bank. With the economy still shaky and most of the Fed's policy ammunition  expended, interest rates could not be lower and billions of dollars are being spent on stimulus, Bernanke hopes to mould the economy through the press. By simply adjusting expectations about future policies, growth, inflation and unemployment, the Fed will hope to influence how the economy behaves in the future and how markets react.

Bernanke will also aim to avoid a repeat of the recent reaction to his $600-billion plan to prime the economy, which was condemned by some as unnecessary even as the Fed struggled to convey that it thought growth and inflation were too low. But there are also risks. Any unscripted response he utters will be parsed, reported on and put to work by investors, with billions if not trillions of dollars at stake.