“Fedspeak” (also “Fed-speak” and “Fed speak”) is when the Federal Reserve says something—especially through its chairman. Alan Greenspan was Chairman of the Federal Reserve from 1987 until 2006. People paid close attention to whatever Greenspan said (hoping that he’d send some indication of what the Federal Reserve planned to do), but his intentions were often difficult to decode from his speech. The term “Fed-speak” has been cited in print since at least February 1991.
“Fedspeak” (not capitalized) can also mean “federal speak,” referring to the federal government.
Wikipedia: Federal Reserve System
The Federal Reserve System (also known as the Federal Reserve, and informally as The Fed) is the central banking system of the United States. It was created in 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure has evolved. Events such as the Great Depression were major factors leading to changes in the system. Its duties today, according to official Federal Reserve documentation, are to conduct the nation’s monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions.
The Federal Reserve System’s structure is composed of the presidentially appointed Board of Governors (or Federal Reserve Board), the Federal Open Market Committee (FOMC), twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous other private U.S. member banks and various advisory councils. The FOMC is the committee responsible for setting monetary policy and consists of all seven members of the Board of Governors and the twelve regional bank presidents, though only five bank presidents vote at any given time. The responsibilities of the central bank are divided into several separate and independent parts, some private and some public. The result is a structure that is considered unique among central banks. It is also unusual in that an entity outside of the central bank, namely the United States Department of the Treasury, creates the currency used.
According to the Board of Governors, the Federal Reserve is independent within government in that “its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government.” However, its authority is derived from the U.S. Congress and is subject to congressional oversight. Additionally, the members of the Board of Governors, including its chairman and vice-chairman, are chosen by the President and confirmed by Congress. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system’s highest-level employees. Thus the Federal Reserve has both private and public aspects. The U.S. Government receives all of the system’s annual profits, after a statutory dividend of 6% on member banks’ capital investment is paid, and an account surplus is maintained. The Federal Reserve transferred a record amount of $45 billion to the U.S. Treasury in 2009.
Wikipedia: Chairman of the Federal Reserve
The Chairman of the Board of Governors of the Federal Reserve System is the head of the central banking system of the United States. Known colloquially as “Chairman of the Fed,” or in market circles “Fed Chairman” or “Fed Chief”. The Chairman is the “active executive officer” (see 12 U.S.C. § 242) of the Board of Governors of the Federal Reserve System.
What Does Fed Speak Mean?
A phrase used to describe former Federal Reserve Board Chairman Alan Greenspan’s tendency to make wordy statements with little substance. Many analysts felt that Greenspan’s ambiguous “Fed speak” was an intentional strategy used to prevent the markets from overreacting to his remarks.
3 February 1991, Trenton (NJ) Evening Times, “Local real-estate market has begun its recovery” by Edward Ridolfi (Schlott Realtors), Classified Marketplace, pg. 6, col. 4:
Further, the trend to lower rates seems primed to continue. Alan Greenspan, the king of the Federal Reserve indicated this week that monetary policy would be eased further, and quite soon. That is Fed-speak for “lower rates are on the way.”
21 February 1991, USA Today, “Greenspan signals rate cuts by Mark Memmott, pg. 1B:
WASHINGTON - Federal Reserve Chairman Alan Greenspan left little doubt Wednesday that the Fed will continue pushing interest rates down in coming months, Fed watchers say.
Speaking to the Senate Banking Committee, Greenspan tipped off Fed watchers to look for more interest-rate cuts when he said inflation pressures have eased, giving the Fed the “scope to move aggressively” as it tries to revive the economy. “Move aggressively,” economists say, is Fed-speak for pushing interest rates down.
13 February 1992, Los Angeles (CA) Times, “When Fed Chief Speaks, Few Understand What He’s Said,” Business, pg. D13:
It’s the art of Fedspeak, those Talmudic-like phrases favored by the world’s top central banker.
Google News Archive
5 March 1994, Sarasota (FL) Herald-Tribune, pg. 1D, col. 2:
Higher interest rates: Translating Fed-speak
By John Crudele
If you want to understand the stock market’s biggest problem in the months ahead, you will have to take a look at a statement made recently by Federal Reserve Chairman Alan Greenspan.
But first you’ll have to get out your Fed-to-English dictionary to translate how the words from the Fed master are going to create problems for you, an investor.
Google Groups: rec.humor.funny
Subject: Fed Speak
(From a news conference broadcast as part of the Osgood Files; quoted from memory.)
Alan Greenspan, chairman of the U.S. Federal Reserve, recently demonstrated his mastery of what he called “Fed Speak”. This is a language in which it is possible to utter a lot of words without ever actually saying anything.
At a press conference of some kind, he was asked the following question, which I present in its entirety:
“Mister Greenspan, are you or do you ever intend to, and if not why not, and if so how and when?”
Greenspan replied, “Yes and no.”
(He later added, “And if you feel I answered the question, I’m sorry.”)
Leo Melamed: Escape to the Futures
By Leo Melamed with Bob Tamarkin
New York, NY: John Wiley & Sons
According to Sprinkel, it seemed that the Fed chairman was not prepared to fight openly with the Treasury secretary so early in their official relationship, and offered some “Fedspeak,” the noncommittal Esperanto language of all central bankers, which Greenspan ultimately perfected during his tenure as Fed chieftain.
Chuck Carlson’s 60-second investor:
201 tips, tools, and tactics for the time-strapped investor
By Charles B. Carlson
New York, NY: McGraw-Hill
The fact is, however, that Fed chairman Alan Greenspan is so gifted at “Fedspeak ” — the art of saying a lot without saying anything of substance — that studying Greenspan’s words for clues about interest-rate direction is akin to ...
OCLC WorldCat record
The complete idiot’s guide to the Federal Reserve
Author: Preston Martin
Publisher: Indianapolis, IN : Alpha, ©2003.
Edition/Format: Book : English
Summary: A fascinating who’s who of the Federal Reserve’s major players; priceless pointers for understanding the secret language of money; valuable tips on deciphering the Fed’s findings when planning your finances.
Pt. 3. The money machine’s hidden powers. The New York Fed: the power behind the throne : learn about open market operations and other key roles unique to the New York Fed ; Your bank’s bank : find out where your bank gets its banking services ; Going behind the scenes : meet the Fed staff and learn how it’s organized ; Fedspeak : the secret language of money : learn how to read the clues in the Fed’s mysterious messages
MARCH 24, 2005
By Kathleen Madigan
A Layman’s Guide to Fedspeak
Greenspan & Co. are the masters of coded language. Here’s a look at what the Fed really means, vs. what it says
In the world of Federal Reserve watchers, analyzing the nuance of a phrase or the use of an adverb in a certain context has become an art form among economists and investors.
OCLC WorldCat record
The Trader - Fed-speak stops the Dow in its tracks. Did Wachovia overpay for Golden West?
Author: Jacqueline Doherty
Publisher: Chicopee, Mass. : Dow Jones & Co., 1994-
Edition/Format: Article : English
Publication: Barron’s. (May 15, 2006): M2
Thursday, Apr 3, 2008 12:33 ET
How to translate Fedspeak
If Ben Bernanke told the plain truth, Wall Street would need a defibrillator. So the man talks softly…
By Andrew Leonard
New York City • Banking/Finance/Insurance • Friday, February 04, 2011 • Permalink