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The Mysterious Minutes of the Federal Reserve

Stephen Morris | E+ | Getty Images

For an outfit that is so vocal about clearly communicating with the public, the Federal Reserve sure is good at being mysterious and even obscure.

Look at the way the Federal Reserve Open Markets Committee describes its discussions in the minutes released yesterday. The various viewpoints raised at the meeting are attributed to "participants" rather than identifiable individuals. This creates the initial level of obscurity: who are the participants?

The FOMC has twelve voting members—seven members of the board of governors of the Fed and five of the 12 Reserve Bank Presidents. But all Reserve Bank presidents attend the meetings and participate in the discussions. It's not entirely clear but it is likely all 19 of these folks count as participants.

The next level of obscurity arises from the way the minutes describe groups of these participants, often using indefinite and imprecise quantifier pronouns.

The policy discussion begins by announcing that Participants hold two views about the economy.

1."In their discussion of the economic situation, meeting participants indicated that they viewed the information received during the intermeeting period as suggesting that, apart from some temporary factors that had led to a pause in overall output growth in recent months, the economy remained on a moderate growth path."

2."In particular, participants saw the economic outlook as little changed or modestly improved relative to the December meeting."

We're given no indication at all which Participants or how many of them agreed with these views. This seems to imply universal consent. Or perhaps it simply indicates a lack of vocal dissent during the meeting. But there's no real way to tell. We're just left to guess.

How exactly would the minute taker know that everyone at the meeting saw the economic outlook as little changed or modestly improved? How do Participants "indicate" things anyway? Do they nod silently or tug their earlobes?

We next encounter a group of FOMC attendees who are described as Most Participants. This group is said to have "judged" that there has been some reduction in downside risk to the economy since the December meeting. Following the blanket description of Participants who indicated and saw points 1 and 2 above, this seems to indicate that at least some attendees did not agree that downside risk has been reduced. But perhaps it only means that they are withholding judgment or sitting silently.

Next we get a grouping that seems broader than Most Participants but narrower than just plain Participants. "Nearly all participants anticipated that inflation over the medium-term would run at or below the Committee's 2 percent objective," the minutes say. So does Nearly All mean that at least one participant anticipates higher inflation? How many count as Nearly All? Eighteen? Seventeen? Sixteen? Take your pick. Your guess is as good as anyone's.

The next group is Some Participants, which occurs three times in the minutes. Following that A Number of Participants. And then Participants Generally. Six times we hear about a view of One Participant. There is also A Few Others. Then A Couple of Participants.

Keep reading and you encounter Several Participants. This presumably is a smaller group than Most Participants and more than A Few Others. But is it greater or lesser than A Number of Participants? Or perhaps they are equal.

All told, the minutes employ at least eight ways of describing groups of Participants. And no one outside of the meeting has any idea whether this is intentional and significant or simply evidence that the minute taker doesn't like to repeat himself (or is that Themselves?) too often.


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