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More Fed news conferences possible under Powell, analysts say

Some analysts are floating the possibility that new Federal Reserve Chairman Jerome Powell will hold more press conferences than his predecessors — even before his first one this week after the Federal Open Market Committee meeting.

Powell, who told Congress last month that he is "committed to clearly explaining what we are doing and why we are doing it,” could decide to hold a news conference after every FOMC meeting, doubling the frequency from the current schedule of every other meeting.

Markets generally expect that the Fed will only make changes to its benchmark federal funds rate at meetings with press conferences, where the chair can explain the change to reporters. In fact, the FOMC has only moved rates in those meetings since they were introduced in 2011 by former Fed Chairman Ben Bernanke.

Diane Swonk, chief economist at Grant Thornton, said in a blog post that the current schedule puts "an artificial limit" on Fed actions. Scheduling more news conferences, she said, would give Powell a chance to "explain in simple terms, and on a more timely basis, what the internal consensus looks like."

"That would help free the Fed to respond to economic data as it becomes available, with less risk of roiling financial markets," she said.

Fed officials have repeatedly tried batting away the perception that they will only move at meetings with press conferences. Former Fed Chair Janet Yellen, for example, repeatedly said "every meeting is a live meeting."

But St. Louis Fed President James Bullard suggested in a Bloomberg News interview last year that the perception from the markets persists. He said he supports having the Fed chair speak after every FOMC meeting, as it would give the Fed more flexibility in its decision making.

It is unclear whether Powell would support the shift — or if he does, when he would make that decision. Seth Carpenter, chief U.S. economist for UBS, said while he does not expect major news out of this week's media appearance, Powell "just might float" the idea of more news conferences.

"His only challenge is to keep markets from wrongly thinking that more-frequent press conferences mean more-frequent rate hikes," he said in a research note. "The communication could be tricky."