How often the Federal Reserve laughs, in one chart
When the Federal Reserve released it 2006 meeting notes, two things quickly came to the forefront: the Fed’s overly optimistic predictions about the economy, and the preponderance of bad jokes and laugh lines. “The current Monetary Policy Report is really terrible. It’s dull; it’s sex made boring,” quipped one Fed governor. As it turns out, 2006 was actually a record year for recorded laughter at the central bank. Noticing the preponderance of guffaws — noted as “[laughter]” in the transcripts — The Daily Stag Hunt went through all the transcripts from 2001 to 2006 to track the trend in recorded laughter.
“The number of recorded laughs actually increased in frequency from 2000 to 2006,” the Daily Stag Hunt explains. “In 2001, the FOMC erupted into laughter 16.5 times per meeting on average. In 2003, it was over 19. In 2005, 27. And then in 2006, the FOMC burst into laughter nearly 44 times per meeting!”
Of course, it could be that the stenographers simply became more diligent about recording the chuckles, guffaws and belly laughs of the Fed over time. But the Daily Stag Hunt notes that Alan Greenspan was particularly prone to witticisms, which may have encouraged his colleagues, and the economic mood at the time was one of giddy optimism. (The author of the post insist there’s a correlation with housing prices.) Here’s one excerpt of a laughter-filled moment in a January 2006 meeting, when then-vice chairman Tim Geithner is praising Greenspan:
VICE CHAIRMAN GEITHNER. Mr. Chairman, in the interest of crispness, I’ve removed a substantial tribute from my remarks. [Laughter]
CHAIRMAN GREENSPAN. I am most appreciative. [Laughter]
VICE CHAIRMAN GEITHNER. I’d like the record to show that I think you’re pretty terrific, too. [Laughter] And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative. [Laughter] With that, the economy looks pretty good to us, perhaps a bit better than it did at the last meeting. With the near-term monetary policy path that’s now priced into the markets, we think the economy is likely to grow slightly above trend in ’06 and close to trend in ’07...
(h/t Real Time Economics)