New U.S. Federal Reserve chairman Ben Bernanke is trying to depersonalize the Fed by making its decision-making more democratic and easier to understand, The Wall Street Journal reported on Friday.
The Journal quoted Mark Gertler, a New York University economist and friend of Bernanke as saying the Fed chairman wants to associate monetary policy less with the chairman and more with the institution.
For years, the newspaper said, markets hung on every word of former Fed chairman Alan Greenspan. It was a sign, the Journal said, of his domination of the institution and his habit of embedding clues about interest rates in carefully crafted, often opaque speeches.
The newspaper said Bernanke's early struggles to communicate in his new job have reinforced his belief that markets place too much emphasis on the Fed chairman's choice of words.
A comment he made in April, which he believed was misinterpreted, led some to question his anti-inflation resolve, the Journal reported.
Bernanke's plan is for the Fed to be more clear about its goals and expectations for inflation and economic growth so that markets don't react so much to his every utterance, the newspaper said.
The paper said that the difference in Bernanke's approach was evident from his decision to speak last when Fed officials debate interest rates. This leaves them freer to say what is on their minds, the paper said.
Greenspan used to set out his recommendations for interest rates and then the other 18 policymakers would say whether or not they agreed.
These changes inside the Fed's policy-making body, the Federal Open Market Committee, are manifestations of an important shift under way in the world's most powerful economic institution, the Journal reported.