DEFINITION of 'Fed Speak'

Fed speak is a phrase used to describe former Federal Reserve Board Chairman Alan Greenspan's tendency to make wordy statements with little substance. Many analysts felt that Greenspan's ambiguous "Fed speak" was an intentional strategy used to prevent the markets from overreacting to his remarks. The assumed intent of Fed speak was to obscure the true meaning of the Fed's intent in an effort to reduce anticipatory action by the market or the investment public. Since Greenspan's reign, other Fed chairs have communicated in a much more concise and direct manner. 

BREAKING DOWN 'Fed Speak'

Greenspan, who was chairman of the Fed from 1986 to 2006, was known for making vague statements that were not easily interpreted. For example, following a speech Greenspan gave in 1995, a headline in the New York Times read, "Doubts Voiced by Greenspan on a Rate Cut," while the Washington Post's headline that day said "Greenspan Hints Fed May Cut Interest Rates." Greenspan's successor, Ben Bernanke, is known for making more direct statements.

RELATED TERMS
  1. Greenspan Put

    Greenspan put was a trading strategy popular during the 1990s ...
  2. Moral Suasion

    The act of persuading a person or group to act in a certain way ...
  3. Board of Governors

    The board of governors is a team responsible for overseeing the ...
  4. Soft Landing

    A soft landing, in economics, is a cyclical downturn which avoids recession.
  5. Overreaction

    Overreaction is an emotional response to news about a security, ...
  6. Fed Funds Futures

    Fed funds futures are contracts that reflect market predictions ...
Related Articles
  1. Insights

    Alan Greenspan: Gold Is Safest Store of Value Right Now

    Alan Greenspan is sounding the alarm on out-of-control entitlements and inflation. Find out why he advocates for a return to the gold standard.
  2. Insights

    Why Greenspan Is Getting Worried About U.S. Interest Rates

    Alan Greenspan says U.S. interest rates have been too low for too long, resulting in a bond market bubble, low productivity growth and possible stagflation.
  3. Investing

    Bond Bubble Is Beginning to Unwind: Greenspan

    Former Fed chief Alan Greenspan said the bond market is in a bubble and that prices are too high.
  4. Insights

    Janet Yellen Vs. Alan Greenspan: Who Is The Better Fed Head?

    We examine how these two histories Fed chairpeople differ and the impact of their views and actions on the world economy.
  5. Insights

    Greenspan Fires a Salvo at Dodd-Frank Reforms

    Former Federal Reserve Chairman Alan Greenspan wants to repeal the Dodd-Frank financial reform bill, saying that it has not worked at all.
  6. Insights

    Translating "Fed Speak" Into Plain English

    Confused by the Fed's lingo? Find out what it can tell you and learn how to decipher it.
  7. Trading

    How The Federal Reserve Was Formed

    Find out how this institution has stabilized the U.S. economy during economic downturn.
  8. Insights

    Does the Fed Influence Who’s in the White House?

    Whether it's intentional or not, the Federal Reserve plays a major role in politics.
  9. Investing

    When The Federal Reserve Intervenes (And Why)

    The Federal Reserve doesn't interfere with the economy every time it flounders. Find out more here.
  10. Insights

    The Federal Reserve

    As an investor, it's important to understand exactly what the Fed does and how it influences the economy.
RELATED FAQS
  1. What caused Black Monday: The stock market crash of 1987?

    Find out about the factors behind the stock market crash of 1987, also known as Black Monday, when the Dow Jones Industrial ... Read Answer >>
  2. What is the difference between a compiled and a certified financial statement?

    All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement ... Read Answer >>
Hot Definitions
  1. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  2. Inflation

    Inflation is the rate at which prices for goods and services is rising and the worth of currency is dropping.
  3. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  4. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  5. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  6. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
Trading Center