The Federal Reserve will start updating the public four times a year on how long it plans to keep short-term interest rates at record lows, according to minutes from its December policy meeting.
The first forecast will be included in the central bank's economic projections after its Jan. 24-25 meeting, the minutes said.
The change marks a significant shift in the Fed's communication strategy. It could help assure investors, companies and consumers that rates won't rise before a specific time. This might help lower long-term yields further — in effect providing a kind of stimulus.
The Fed has previously said that it plans to keep its key short-term rate near zero until at least mid-2013, unless the economy improves.
The Fed has left rates near zero for the past three years.
After its Dec. 13 meeting, the Fed issued a policy statement that portrayed the U.S. economy as improving slightly. But the central bank declined to take any additional steps to boost growth.
The minutes also suggest the Fed could be poised to launch some new step to invigorate the economy. Some members favored bolder action but said they wanted to wait until the more explicit communication policy was in place.
"The potential for increased transparency is a positive," said Michael Murphy, managing partner and CEO of Rosecliff Capital. "It will give the markets more access to the thought process of the FOMC . It could definitely wreak havoc if they are not clear on what they are trying to accomplish."
In January, the Fed will release an interest rate forecast for the fourth quarter of 2012 and for the next few calendar years. It will update that forecast four times a year.