Here's the bizarre reason Fed statements became a whole lot easier to read in 2002
In an email to clients Tuesday, Torsten Sløk, chief international economist at Deutsche Bank, presented a chart of the Flesch-Kincaid readability level of the Federal Reserve's monetary policy statements.
Sløk points out that the reading level of the statements that are released after every Federal Open Markets Committee decision on monetary policy has dropped during current Chair Janet Yellen's tenure.
While we have no explanation as to why (Increased transparency? Changes in the length of statements?), there was another interesting tidbit that really caught our eye: During the tenure of former Chair Alan Greenspan, a monumental drop occurred in the reading level seemingly out of nowhere. What in the world happened in 2002?
Deutsche Bank
Between 1994 and 2002, the reading level of Chair Greenspan's statements fluctuated between 13.5 and 19.5. Between 2001 and 2002, however, there was a drop in the statement's difficulty from around a 17.5 level to approximately 9.5.
In a cursory search of the statements between 2000 and 2003, it appears that they are essentially the same. Short, three or four paragraph statements on the policy decision and economic outlook from the FOMC.
At the bottom of the statements, however, the key difference appears.
In 2002 the FOMC began to release the roll call of how various members voted on the policy proposals. This would appear to be the source of the precipitous drop, since names are simple to read. It seems that Greenspan's Fed didn't become any more clear or simplistic in explaining themselves, they just started listing names.
We suppose you can just chalk it up to another odd quirk in the history of the Fed.
- A centenarian who starts her day with gentle exercise and loves walks shares 5 longevity tips, including staying single
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- FSSAI in process of collecting pan-India samples of Nestle's Cerelac baby cereals: CEO
- India's e-commerce market set to skyrocket as the country's digital economy surges to USD 1 Trillion by 2030
- Top 5 places to visit near Rishikesh
- Indian economy remains in bright spot: Ministry of Finance
- A surprise visit: Tesla CEO Elon Musk heads to China after deferring India visit
- Unemployment among Indian youth is high, but it is transient: RBI MPC member