In the central bank effectiveness stakes the European
Central Bank has been most often compared - generally unfavourably
- with the US Federal Reserve. Certainly the Fed seems more
responsive to market movements and talks to the market rather a lot
too. But then how effective is all this communication?
"Loose lips sink ships" was the wartime watchword in official
Washington. But who would know it today? The formerly secretive
Federal Reserve doesn't seem the least bit concerned when its
people speak their minds in public. So a veritable cacophony of
views sometimes gushes forth from the US central bank.
The Fed's new-found gift of the gab doesn't seem to have done any
harm - at least not yet. "The dollar remains firm against the
currencies of nominally hawkish central banks," says John Makin, an
economist at Caxton&Co in New York who spends part of his time
as a policy expert at Washington's...
