Fed Considers Dramatic Shift in Interest Rate Meetings

The US Federal Reserve is considering reducing the number of regular meetings to set benchmark interest rates, according to The New York Times. This change would be a significant shift in how the Fed operates, and could potentially delay responses to changes in prices and employment conditions.

Currently, the Fed holds eight two-day Federal Open Market Committee (FOMC) meetings per year, about six weeks apart. These meetings determine the benchmark interest rate, and the contents of each meeting are disclosed through FOMC minutes three weeks later.

The change is being considered by Chairman Jerome Powell, but the Fed has declined to comment on the matter. The decision would not be subject to legal restrictions, as the 1935 Banking Act only requires the FOMC to hold at least four meetings per year.

However, reducing the number of meetings could have unintended consequences, including a decrease in transparency and an increased delay in responding to economic changes.