HousingWire – Christina Mlynski
The release of the Federal Open Market Committee meeting minutes used to be a big market mover, but in today’s zero-interest-rate-policy environment, that’s just not the case. It’s a more transparent world at today’s Fed and by the time the minutes are released, the Fed has already tipped its hat a bit to let investors in on at least part of the secret. FOMC communications prior to the minutes release are now more open and informative, said Federal Reserve Bank of New York economist Carlo Rosa in a report. Additionally, the sensitivity of asset prices — particularly interest rates — to news diminishes when short-term rates hit the zero lower bound. "Central bank communication has become increasingly transparent over the past decade," Rosa said. "This is important not only for reasons of democratic legitimacy and accountability, but also for monetary policy to be most effective."