During the Cold War, national security analysts spoke knowingly about the art of “Kremlinology.” This was a technique for understanding Soviet power relations and policy changes taking place inside the leadership compound in the Kremlin.
The Soviet Union was completely opaque. One-time leaders could be demoted and new leaders advanced without any public acknowledgement. One technique for gleaning information was to look at photographs of Soviet leaders assembled on top of Lenin’s Tomb in Red Square on important occasions. Such photographs were among the few glimpses of the leadership available to the public. Analysts were careful to note the proximity of each figure in the photo to a supreme leader such as Leonid Brezhnev. A Politburo member who was adjacent to Brezhnev one year but two places away the next had clearly been demoted.
Unfortunately our access to Federal Reserve monetary policy is not much improved over those Cold War techniques. The understanding of Fed policy is left to careful scrutiny of official speeches, reading between the lines of various statements, and using software to detect subtle shifts in wording such as “prepared to take” turning into “will provide” as the standard for further ease.
Even these resources are of limited use since regional Federal Reserve Bank presidents often contradict each other and the Fed Board often hides its true motivations. They will tell the public what they are doing without really saying why. The situation is not much better in Europe where national central bank heads sometimes quarrel with the European Central Bank…