Finally, the Fed communicates directly with
financial markets and the public via its public pronouncements.
Following regularly scheduled
FOMC
meetings
or any monetary policy action, the Fed issues a press release
announcing the discount rate and its target for the federal funds
rate. It also offers a brief assessment of the major factors it
believes are affecting economic performance at the time, and says
whether it thinks the economy faces a greater risk of inflation
on one hand, or of weakness on the other. When the public agrees
with the Fed, the actions it takes are more effective, and unnecessary
turmoil in financial markets is avoided.
Other channels of communication include regular
reports to Congress by the Fed chairman, and frequent speeches
and media interviews by Fed governors and Bank presidents.
Anthony Santomero,
Federal Reserve
Bank of Philadelphia
Anthony Santomero, 
