{{Short description|Intentionally obfuscating remarks by U.S. federal reserve to prevent market shocks}} In [[monetary policy of the United States]], the term '''Fedspeak''' (also known as '''Greenspeak''') is what [[Alan Blinder]] called "a turgid dialect of English" used by [[Federal Reserve Board]] chairs in making wordy, vague, and ambiguous statements.<ref name="BlinderStudies2001"/><ref>{{cite news|title=What will fly hear Fed say on Tuesday?|url=http://www.financialpost.com/What+will+hear+Tuesday/3371508/story.html|last=Hanley|first=William|date=August 7, 2010|work=Financial Post|access-date=18 August 2010}}{{dead link|date=September 2013}}</ref> The strategy, which was used most prominently by [[Alan Greenspan]], was used to prevent financial markets from overreacting to the chairman's remarks.<ref name=Leonard1>{{cite news|last=Leonard|first=Devin|author2=Peter Coy|title=Alan Greenspan on His Fed Legacy and the Economy|work=Business Week|date=August 13, 2012|pages=65|url=http://www.businessweek.com/articles/2012-08-09/alan-greenspan-on-his-fed-legacy-and-the-economy|archive-url=https://web.archive.org/web/20120812235548/http://www.businessweek.com/articles/2012-08-09/alan-greenspan-on-his-fed-legacy-and-the-economy|url-status=dead|archive-date=August 12, 2012}}</ref><ref name="The Shy Wizard of Money">{{cite news|last1=Weeks|first1=Linton|last2=Berry|first2=John M.|title=The Shy Wizard of Money| url=https://www.washingtonpost.com/wp-srv/business/longterm/fed/greenspan/profile.htm|newspaper=Washington Post|access-date=4 September 2014|page=A1|date=March 24, 1997}}</ref> The coinage is an intentional parallel to [[Newspeak]].<ref name="Liberty Street Economics">{{cite web|last1=Farber|first1=Amy|title=Historical Echoes: Fedspeak as a Second Language|url=http://libertystreeteconomics.newyorkfed.org/2013/04/historical-echoes-fedspeak-as-a-second-language.html|website=Liberty Street Economics|access-date=5 September 2014|date=April 19, 2013}}</ref>
Fedspeak when used by Alan Greenspan is often called Greenspeak. An alternative definition of Greenspeak is "the coded and careful language employed by U.S. Federal Reserve Board Chairman Alan Greenspan."<ref name="Greenspeak">{{cite web|last1=McFedries|first1=Paul|title=Greenspeak|url=http://www.wordspy.com/words/Greenspeak.asp|website=www.wordspy.com|access-date=4 September 2014|archive-date=4 September 2014|archive-url=https://web.archive.org/web/20140904225423/http://www.wordspy.com/words/Greenspeak.asp|url-status=dead}}</ref>
Edwin le Heron and Emmanuel Carre state that "Nowadays, 'Fedspeak' (Bernanke, 2004) means clear and extensive communication of the Fed's action."<ref name="WrayForstater2006">{{cite book|last1=Wray|first1=L. Randall|last2=Forstater|first2=Mathew|title=Money, financial instability and stabilization policy|url=https://books.google.com/books?id=8HNDEhXbP5UC&pg=PA68|access-date=5 August 2010|year=2006|publisher=Edward Elgar Publishing|isbn=978-1-84542-474-9|page=68}}</ref> Chairman [[Ben Bernanke]] and Chairwoman [[Janet Yellen|Yellen]] have effected a major change in Fed communication policy departing from the obfuscation that characterized the previous three decades. In 2014 a new detailed level of Fed communication was dubbed '''Fedspeak 3.0'''.<ref name=CNBC>{{cite news|last1=Cox|first1=Jeff|title=Fedspeak 3.0: The 'dot plot'|url=https://www.cnbc.com/2014/06/17/fedspeak-30-the-dot-plot.html|access-date=4 September 2014|work=CNBC|publisher=CNBC|date=June 17, 2014}}</ref> In 2018, Chairman [[Jerome Powell]] would begin [[press conferences]] with a summary statement in [[plain English]], in contrast to his predecessors who would read lengthy prepared statements loaded with [[monetary policy]] [[jargon]].<ref>{{cite web|url=https://www.nytimes.com/2018/06/13/us/politics/federal-reserve-raises-interest-rates.html|title=Fed Raises Interest Rates and Signals 2 More Increases Are Coming|website=New York Times|author=Jim Tankersley|author2=Neil Irwin|date=June 13, 2018|access-date=June 14, 2018|quote=He [Jerome Powell] began his session with the news media with what he called a 'plain English' description of what the Fed had done and why, a contrast with the practice of Ms. Yellen and her predecessor, Ben S. Bernanke, both Ph.D. economists who prefaced their appearances with long prepared statement loaded with monetary policy jargon.}}</ref>
In 2021, Powell used a [[recursive]] syntax in saying that "you can think of this meeting that we had as the 'talking about talking about' meeting."<ref>{{cite web|url=https://www.cnbc.com/2021/06/16/fed-meeting-live-updates-watch-jerome-powell-speech.html|website=CNBC|title=Federal Reserve meeting full recap|date=June 16, 2021|accessdate=June 17, 2021}}</ref> He added, "I now suggest that we retire that term."
==Origin== The notion of fed speak originated from the fact that financial markets placed a heavy value on the statements made by Federal Reserve governors, which could in turn lead to a [[self-fulfilling prophecy]]. To prevent this, the governors developed a language, termed Fedspeak, in which ambiguous and cautious statements were made to purposefully obscure and detract meaning from the statement.<ref name="Franks2004">{{cite book|last=Franks|first=Dale|title=Slackernomics: Basic Economics for People Who Think Economics Is Boring|url=https://books.google.com/books?id=Pg3SvHIl5RAC&pg=PA102|access-date=5 August 2010|date=May 2004|publisher=iUniverse|isbn=978-0-595-31699-1|page=102}}</ref>
Though previous "Fed" chairmen [[Arthur Burns]] and [[Paul Volcker]] were known for blowing smoke, both literally and figuratively, when appearing before Congress, Alan Greenspan is credited with making Fedspeak a "high-art".<ref name="BlinderStudies2001">{{cite book|last1=Blinder|first1=Alan S.|last2=Studies|first2=International Center for Monetary and Banking|title=How do central banks talk?|url=https://books.google.com/books?id=BRDpxkifAG0C&pg=PA66|access-date=5 August 2010|year=2001|publisher=Centre for Economic Policy Research|isbn=978-1-898128-60-1|page=66}}</ref> It is unclear whether the term Fedspeak was used widely prior to Greenspan, but with historical hindsight the modern term could be used to describe Burns's and Volcker's method.<ref name="Liberty Street Economics"/>
==Usage by Alan Greenspan== {|class="toccolours" style="float: right; margin-left: 0.5em; margin-right: 1em; font-size: 85%; background:#c6dbf7; color:black; width:20em; max-width: 25%;" cellspacing="5" |style="text-align: left;"|He used to take pride in the resulting obfuscation—even characterizing his own way of communicating as 'mumbling with great incoherence'. In a famous incident, he once told a US senator who claimed to have understood what the famously [[obscurantist]] chairman had just said, "in that case, I must have misspoken". |- |style="text-align: left;"|— ''How do central banks talk?''<ref name="BlinderStudies2001" /> |} Although it was originally believed by some that [[Alan Greenspan]], who is generally credited for popularizing Fedspeak, may have used such language unintentionally, he revealed in his 2007 book ''[[The Age of Turbulence]]'', that the method of avoiding the issues directly when a clear message was not desired was indeed intentional. Greenspan states that the confusion, which often resulted in conflicting interpretations, was used to prevent unintended jolts to the markets as confusing statements were typically ignored.<ref name="Canterbery2006">{{cite book|last=Canterbery|first=E. Ray|title=Alan Greenspan: the Oracle Behind the Curtain|url=https://archive.org/details/alangreenspanora0000cant|url-access=registration|access-date=5 August 2010|date=2006-06-15|publisher=World Scientific|isbn=978-981-256-606-5|page=[https://archive.org/details/alangreenspanora0000cant/page/36 36]}}</ref>
He noted that he came upon the dialect while at the Fed: "What I've learned at the Federal Reserve is a new language which is called 'Fed-speak'. You soon learn to mumble with great incoherence."<ref name="BessettePitney2010">{{cite book|last1=Bessette|first1=Joseph M.|last2=Pitney Jr.|first2=John J.|title=American Government and Politics: Deliberation, Democracy and Citizenship|url=https://books.google.com/books?id=8uu8cevL2iUC&pg=PA578|access-date=1 May 2011|date=1 January 2010|publisher=Cengage Learning|isbn=978-0-534-53684-8|page=578}}</ref>
In an interview with ''[[60 Minutes]]''{{'}}s [[Lesley Stahl]] on September 16, 2007, Stahl stated how "In public, Greenspan was inscrutable whenever congress asked about interest rates. He resorted to an indecipherable delphic dialect known as fedspeak" to which Greenspan responded that "I would engage in some form of syntax destruction which sounded as though I were answering the question, but in fact, had not."<ref name="60minSep16">{{Cite episode| title = September 16, 2007 Alan Greenspan; Swimming with Sharks|url = http://www.cbsnews.com/video/watch/?id=3265914n | access-date = August 16, 2012 | date = September 16, 2007 | series = [[60 Minutes]] | season =39 | number =50| credits=[[Lesley Stahl|Stahl, Lesley]] (host)}}</ref><ref name="Horsley">{{cite news|url=https://www.npr.org/templates/story/story.php?storyId=14465152|title=Greenspan Memoir Critical of Republicans : NPR|last=Horsley|first=Scott|date=September 17, 2007|work=[[NPR]]|publisher=NPR|access-date=10 January 2011}}</ref> When Stahl noted that Greenspan's responses were "impenetrably profound" and that this resulted in "two newspapers getting opposing headlines coming out of the same hearing", Greenspan responded that "I succeeded".<ref name="60minSep16"/>
In an interview with [[CNBC]]'s [[Maria Bartiromo]] on September 17, 2007, when asked to describe Fedspeak, Greenspan described it as: {{quote| It's a—a language of purposeful obfuscation to avoid certain questions coming up, which you know you can't answer, and saying—'I will not answer,' or basically, 'no comment,' is, in fact, an answer. So, you end up with when, say, a Congressman asks you a question, and don't wanna say, 'No comment', or 'I won't answer', or something like that. So, I proceed with four or five sentences which get increasingly obscure. The Congressman thinks I answered the question and goes onto the next one.<ref name=Dauble>{{cite web|last=Dauble|first=Jennifer|title=Former Fed Chairman Alan Greenspan speaks extensively to Maria Bartiromo|date=17 September 2007|url=https://www.cnbc.com/2007/09/17/former-fed-chairman-alan-greenspan-speaks-extensively-to-maria-bartiromo.html|publisher=CNBC|access-date=17 August 2012}}</ref> }}
In an interview with ''[[BusinessWeek]]'' in August 2012, when asked "about practicing the art of constructive ambiguity", Greenspan replied: {{quote| As Fed chairman, every time I expressed a view, I added or subtracted 10 basis points from the credit market. That was not helpful. But I nonetheless had to testify before Congress. On questions that were too market-sensitive to answer, 'no comment' was indeed an answer. And so you construct what we used to call Fed-speak. I would hypothetically think of a little plate in front of my eyes, which was the ''Washington Post'', the following morning's headline, and I would catch myself in the middle of a sentence. Then, instead of just stopping, I would continue on resolving the sentence in some obscure way which made it incomprehensible. But nobody was quite sure I wasn't saying something profound when I wasn't. And that became the so-called Fed-speak which I became an expert on over the years. It's a self-protection mechanism ... when you're in an environment where people are shooting questions at you, and you've got to be very careful about the nuances of what you're going to say and what you don't say.<ref name=Leonard1/> }}
==Examples of Greenspeak== {|class="toccolours" style="float: right; margin-left: 0.5em; margin-right: 1em; font-size: 85%; background:#c6dbf7; color:black; width:20em; max-width: 100%;" cellspacing="5" |style="text-align: left;"|The Fed has a language all its own, and unfortunately, the folks over at [[Rosetta Stone (software)|Rosetta Stone]] have yet to create a program to help laypeople understand what the hell the fed is talking about. |- |style="text-align: left;"|— [[Ron Insana]]<ref name="Insana2009">{{cite book|last=Insana|first=Ron|title=How to Make a Fortune from the Biggest Bailout in U.S. History: A Guide to the 7 Greatest Bargains from Main Street to Wall Street|url=https://books.google.com/books?id=oiPweutpvRYC&pg=PT117|access-date=28 May 2011|date=31 December 2009|publisher=Penguin|isbn=978-1-58333-364-8|page=117}}</ref> |} {{as of|2011}}, the [[Federal Reserve Bank of Dallas]] website still maintains a "Greenspeak" page with dozens of excerpts from Greenspan's past statements as head of the Federal Reserve Bank. Each quotation has a pointer to its full context in his speech, and is posted without commentary or interpretation.<ref name=FRBDallas>{{cite web|title=Greenspeak|url=http://www.dallasfed.org/news/speeches/greenspeak.html|work=FRB Dallas [website]|publisher=Federal Reserve Bank of Dallas|archive-url=https://web.archive.org/web/20120212132248/http://www.dallasfed.org/news/speeches/greenspeak.html|archive-date=2012-02-12|access-date=2016-12-14|url-status=dead}}</ref>
{{quote|text=The members of the Board of Governors and the Reserve Bank presidents foresee an implicit strengthening of activity after the current rebalancing is over, although the central tendency of their individual forecasts for real GDP still shows a substantial slowdown, on balance, for the year as a whole.|sign=[[Alan Greenspan]]|source=Testimony from the Federal Reserve Board's semiannual monetary policy report to the Congress before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate on February 13, 2001<ref name="frbdq">{{cite web|url=http://www.dallasfed.org/news/speeches/greenspeak.html|title=Greenspeak (Quotes from Chairman Greenspan )|publisher=Federal Reserve Bank of Dallas|archive-url=https://web.archive.org/web/20120212132248/http://www.dallasfed.org/news/speeches/greenspeak.html|archive-date=2012-02-12|access-date=2016-12-14|url-status=dead}}</ref><ref>{{cite web|url=http://www.federalreserve.gov/boarddocs/hh/2001/February/Testimony.htm|title=FRB: Testimony, Greenspan -- Monetary Policy Report to the Congress-- February 13, 2001|last=Greenspan|first=Alan|access-date=23 May 2011}}</ref>}}
{{quote|text=Risk takers have been encouraged by a perceived increase in economic stability to reach out to more distant time horizons. But long periods of relative stability often engender unrealistic expectations of it[s] permanence and, at times, may lead to financial excess and economic stress.|sign=[[Alan Greenspan]]|source=testimony on his 35th appearance before the Financial Services Committee of the [[US House of Representatives]] on July 20, 2005<ref name="Canterbery2006" />}}
{{"|Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when [[irrational exuberance]] has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?|sign=[[Alan Greenspan]]|source=[http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm "The Challenge of Central Banking in a Democratic Society"], 1996-12-05<ref name="The Shy Wizard of Money"/><ref name="Greenspeak"/><ref>{{cite book|last1=Rogers|first1=R. Mark|title=The Complete Idiot's Guide to Economic Indicators|date=2009|publisher=Penguin|chapter=Chapter 1|isbn=9781101140604|url=https://books.google.com/books?id=TjFqcCb4zmgC|access-date=4 September 2014}}</ref>}}
{{quote|text=I would generally expect that today in Washington DC the probability of changes in the weather is highly uncertain, but we are monitoring the data in such a way that we will be able to update people on changes that are important.|sign=[[Alan Greenspan]]|source=Greenspan describing the weather in response to a question by [[Owen Bennett-Jones]] on BBC's ''The Interview'' (October 2007)}}
==Other usage== [[File:Fomcprojtabl20170315.png|thumb|The U.S. Federal Open Market Committee "dot plot" for March, 2017: participants' assessments of appropriate monetary policy: Midpoint of target range or target level for the federal funds rate.<ref>{{cite web|url=https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20170315.pdf|title=Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy, March 2017|page=3|author=United States Federal Open Market Committee|date=15 March 2017|access-date=12 July 2017}}</ref> The chart resembles a plot of objective economic data, but each dot represents a mere opinion of an individual committee member predicting a hypothetical future. The horizontal axis shows the future time in years, and the vertical axis shows the federal funds rate in percent.]]
In the 2010s, the [[Federal Reserve]] [[Federal Open Market Committee|Open Market rate-setting committee]] (FOMC) began publishing [[dot plot (statistics)|dot plot]]s to tabulate all individual committee member projections of target interest rates in a single graphic.<ref name=CNBC/> In 2016, the president of the [[Federal Reserve Bank of St. Louis|St. Louis Fed]] [[James B. Bullard|James Bullard]] began a movement away from the dot plot exercise, citing a gap of opinion between market economists and FOMC members.<ref>[[David Marsh (financial specialist)|Marsh, David]], [http://www.marketwatch.com/story/feds-bullard-shakes-up-fed-with-refusal-to-forecast-the-end-of-easy-money-2016-07-19 "Opinion: Fed’s Bullard shakes up Fed with refusal to forecast the end of easy money"], ''[[MarketWatch]]'', July 20, 2016. Retrieved 2016-08-04.</ref> {{as of|2018}}, the FOMC has continued to publish dot plots in its economic projections, detailing the variety of opinions of the committee members for the "appropriate target range for the federal funds rate" in future years.<ref>{{cite web|url=https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20180613.pdf|title=Chairman's FOMC Press Conference Projections Materials: Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy, June 2018|website=[[Federal Reserve System|U.S. Federal Reserve]]|date=June 13, 2018|access-date=June 14, 2018}}</ref>
==Commentary== The University of Virginia Writing Program Instructor Site offers some selected quotations from Greenspan, with a suggestion that students be given writing exercise assignments of clarifying their expression of ideas.<ref name=UVaWriting>{{cite web|title=Greenspeak|url=http://www.faculty.virginia.edu/schoolhouse/WP/Greenspeak.html|work=UVa Writing Program Instructor Site|publisher=University of Virginia|access-date=2011-05-09|archive-url=https://web.archive.org/web/20110728031229/http://www.faculty.virginia.edu/schoolhouse/WP/Greenspeak.html|archive-date=2011-07-28|url-status=dead}}</ref>
A [[public relations]] firm cites an example of "Greenspeak" as the statement of one of the "master practitioners of creative ambiguity over the years". The brief essay mentions two other master practitioners of obfuscation, [[Hubert H. Humphrey]] and [[Casey Stengel]]. The overall tone of the essay is one of awed admiration for a sometimes-necessary skill in obscurantism. In closing, the writer notes that, "As professional performers say, to deliberately sing off-key requires a highly skilled singer."<ref name=MediaPrepGreenspeak>{{cite web|title=ALAN GREENSPEAK – WHAT'D HE SAY?|url=http://www.mediaprep.com/articles/greenspan.shtml|work=MediaPrep [website]|publisher=mediaprep.com|access-date=2011-05-09|archive-date=2010-10-11|archive-url=https://web.archive.org/web/20101011133733/http://www.mediaprep.com/articles/greenspan.shtml|url-status=dead}}</ref>
==See also== *[[Index of public relations-related articles]] *[[Security through obscurity]] *[[Technobabble]] *[[Officialese]]
==References== {{Reflist|30em}}
==Further reading== * {{cite journal|last=Resche|first=C.|title=Investigating 'Greenspanese': From Hedging to 'Fuzzy Transparency'|journal=Discourse & Society|date=1 November 2004|volume=15|issue=6|pages=723–744|doi=10.1177/0957926504046502|s2cid=144293156|url=https://hal.sorbonne-universite.fr/hal-04055407/file/Investigating.pdf }}
==External links== * [http://www.federalreserve.gov/boarddocs/speeches/2004/200401032/default.htm Fedspeak], Remarks by Governor Ben S. Bernanke
{{Federal Reserve System}}
[[Category:Monetary policy of the United States]] [[Category:Business terms]] [[Category:Corporate jargon]] [[Category:Federal Reserve System]] [[Category:Political terminology]] [[Category:Euphemisms]] [[Category:Forms of English]]