When Will The FOMC Change Its Statement? The Experts Weigh In

Randy Moore from Aspen Publishers brought my attention to a special question on just this topic that was addressed in the latest edition of Blue Chip Economic Indicators.  With his permission, I share the results with you:

Q: In the FOMC’s policy statement, will the phrase “measured pace” be dropped before, at the same time, or after the phrase “monetary policy is accommodative” is dropped from the statement?

Response:  Before: 8.9%; At the same time: 82.2%; After: 8.9%.

Q: Will the FOMC drop the phrase “measured pace” and/or “monetary policy is accommodative” from its policy statement before, at the same time, or after it pauses in its tightening cycle?

Response:  Before: 35.6%; At the same time: 57.8%; After: 6.7%.

The answers to the second question are interesting, as they suggest that most forecasters think the measured pace language does not much constrain the Committee meeting-to-meeting.  Here's something I'd like to know: Do the Blue Chip responses to this question reflect the opinion that the FOMC will find plenty of alternative ways to signal a pause if the time is drawing near -- as William Polley suggests?  Or does it suggest that the press-statement language has become largely meaningless?

UPDATE:  My colleague Chuck Carlstrom -- always keeping me honest -- suggests that my interpretation of the survey responses may not be correct.  Chuck offers the following hypothetical series of events:

Meeting 1: Increase by 25 basis points, no change in language.
Meeting 2: Increase by 25 basis points, drop language.
Meeting 3: No change in funds rate, no change in language.

Chuck asks, is the pause at meeting 2 or meeting 3?  How you answer that question determines how you answer the question posed by the Blue Chip folks.  I was interpreting the majority of respondents as suggesting that they were expecting  the language to be dropped at  the meeting in which the FOMC votes a "no change" in the funds rate.  But as I think about it, it may be more likely that "at the same time" means meeting 2 in Chuck's example.  If that is the correct interpretation, if I had participated in the survey I actually would have answered "before the meeting," and yet meant exactly the same thing as those answered "at the meeting."