In this section, authors express their personal views on economic and financial topics.
Kevin Warsh, the new chairman of the US Federal Reserve (Fed), made it clear at the first interest rate decision under his leadership that he intends to communicate more concisely than his predecessors. The statement was shortened, forward guidance was dropped, and the press conference was shorter.
It is not the first time that the communication of the head of a leading central bank has caused a stir and sparked controversy, as a look at four examples from recent history shows.
Alan Greenspan before Congress in 2005. (Image: Shutterstock)
«Irrational exuberance.» With this phrase, then Fed chairman Alan Greenspan, who recently passed away, warned 30 years ago of what he regarded as a significant overvaluation of equities. Market participants interpreted his words as a warning and feared interest rate hikes. Two words sent stock markets around the world tumbling.
