As Fed balance sheet expands, so does "forward guidance"
By Chelsea Vail
January 14, 2014
How does the Fed look to Deutsche Bank's chief international economist? John H. Cochrane, Chicago Booth professor and self-styled Grumpy Economist blogger, got a sneak peek from Torsten Slok of a slide deck evaluating the US economy. Cochrane shared three charts ("Sorry, the slide deck isn't public," he notes) including the one below, which shows a correlation between the Fed balance sheet and the number of words in FOMC statements. Both are going up—the "price per extra word," according to the chart, is a cool $6 billion. For two employment-related charts and commentary, read the Grumpy Economist post.