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. Board of Governors

    The board of governors is a team responsible for overseeing the ...
  3. Internet Bubble

    The internet bubble, also known as the dot-com bubble, is a textbook ...
  4. Federal Reserve System - FRS

    The Federal Reserve System, commonly known as the Fed, is the ...
  5. Hawk

    A hawk is a policymaker or advisor who focuses on interest rates ...
  6. Fed Balance Sheet

    The Fed balance sheet is the U.S. Federal Reserve System's balance ...
Related Articles
  1. Investing

    Stocks' Big Threat Is a Bond Collapse: Greenspan

    Rapid rate increases may pop a bond market bubble, killing stocks
  2. Insights

    The Federal Reserve

    As an investor, it's important to understand exactly what the Fed does and how it influences the economy.
  3. Insights

    The Legacy Of Ben Bernanke

    Will Bernanke go down in history as one of the greatest-ever chairpersons of the Fed, or is his legacy likely to be tarnished by events after his departure from the position, as was the case ...
  4. Insights

    Experimental Monetary Policy: Are We Stuck?

    Interest rates may be stuck near the zero lower bound (ZLB), thanks to experimental monetary policy from the Fed and over-spending from the U.S. government.
  5. Insights

    7 Misconceptions About The Federal Reserve

    There are many fallacies about the Fed. The following misconceptions are among the most popular.
  6. Insights

    Grading Janet Yellen

    Read a review of how Fed chairwoman Janet Yellen performed in her tenure as head of the Federal Reserve, and why it is more complicated than you think.
  7. Investing

    5 People Blamed For The Financial Crisis

    The housing bubble, and the resulting financial crisis, has many different parents to blame.
  8. Investing

    Stocks Face "Nasty Shock" From Fed-Created Bubble

    High valuations in both stocks and bonds, an unusual event, threaten to give investors a "nasty shock"
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 >>
Trading Center