WASHINGTON, Nov 14 (Reuters) The Federal Reserve said on Wednesday it will make economic projections for longer periods and distribute them more often in an effort to shed light on the likely path of interest rates and optimal levels of inflation.
The Fed will release economic projections four times a year instead of two and policy-makers' projections will cover three years instead of two, the U.S. central bank said in a statement.
''Providing more information about these forecasts, including discussions of the factors underlying the forecasts and of (Fed) participants' assessments of the risks to the committee's objectives, should improve the public's understanding of the rationale for the current stance of monetary policy and any changes to that stance,'' Fed Chairman Ben Bernanke said in speech at the Cato Institute.
The Fed will publish the expanded forecasts beginning next week with the minutes of its Oct. 30-31 meeting, Bernanke said.
In 2008, the Fed's forecasts will appear with the minutes of the Fed's January, April, June, and October meetings, which are usually released three weeks after the gatherings.
In keeping with the Fed's past practice, each member of the interest-rate setting Federal Open Market Committee will make a forecast based on their own determination of the interest-rate path most likely to achieve the Fed's dual goals of maintaining price stability and full employment, Bernanke said.
The Fed chairman said the greater sharing of information will give the public a more timely insight into the Fed's views of the outlook and risks to that outlook.
''I find it helpful to think of the projections as functioning in three different ways: as a forecast, as a provisional plan, and as an evaluation of certain long-run features of the economy,'' he said.
REUTERS BJR BD2010