Fed's Briefer Statements Under New Chair Raise Questions on Communication Strategy

The Federal Reserve's communication strategy has undergone changes over time, reflecting the preferences of Federal Open Market Committee (FOMC) policymakers. Under new Fed Chair Kevin Warsh, who has presided over only two meetings so far, FOMC post-meeting statements have been notably shorter. Our analysis shows that meeting statement word counts have indeed trended lower, with the two most recent post-FOMC meeting statements having the lowest word counts since January 2008.

The FOMC minutes for Warsh's first two meetings as chair are also the shortest since September 2008. Furthermore, the rolling average reveals that the length of FOMC post-meeting statements tends to increase during periods of economic stress, with large increases in word counts starting in 2008 and 2020.

Breaking down the FOMC statements by component sections shows that the reductions in word count were broad-based. Four sections shed at least 200 words compared to the FOMC's last meeting statement under Powell.