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Federal Reserve unveils plan to be a little less secretive

The Federal Reserve intends to begin releasing a quarterly interest-rate forecast as a service to investors and to counter critics who say it is not transparent enough.

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Protesters at an Occupy LA march in November show some of the criticism facing the Federal Reserve. The Fed is taking steps to increase its transparency.

Lucy Nicholson/REUTERS/File

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The Federal Reserve plans to give the public a first-ever view of where Fed officials see interest rates heading in coming months and years.

It won't be a firm predictor of Federal Reserve policy, but economists say the move will help give investors a better glimpse into the thinking of central bankers and their possible course of action.

Starting later this month, a quarterly Federal Reserve summary of economic projections (SEP) report will include information about the outlook from the various particpants on the central bank's policy committee. These forecasts will focus on the so-called federal funds rate, the short-term interest rate for loans among banks that the Federal Reserve determines through its policy.

"The SEP ... will report participants' current projections of the likely timing of the first increase in the target rate given their projections of future economic conditions," the Federal Reserve said in minutes released Tuesday. That would accompany forecasts showing what the officials see as an appropriate federal funds rate for the final
quarter of the year and the next few years.

The move is another step toward greater transparency, a hallmark of the Federal Reserve under Chairman Ben Bernanke.

The bank is under pressure to find ways to better influence the trajectory of a now-weak economy, and to improve its own public image at a time when some politicians are harshly critical of its actions.

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