Schneider of Reuters parses the Fed beat

Howard Schneider joined Reuters in April 2014 to help lead its Federal Reserve Board coverage.

Before that, he was covering international economics for the Washington Post for the past four years with stories ranging from trade and the euro zone crisis to the International Monetary Fund and U.S.-China economic relations. He has extensive experience in both economics and international affairs.

In more than 25 years at the Post, Schneider led coverage from Jerusalem, Cairo and Toronto, and has served as both economics editor and local business editor. He started at the Post as a Metro staff writer, and has taught journalism and writing.

He joined Michael Flaherty in leading Reuters’ Fed coverage from Washington. Schneider has a bachelor’s degree in economics from the University of Maryland.

Schneider spoke with Talking Biz News by email about covering the Fed. What follows is an edited transcript.

What interested you in joining Reuters last year?

I wanted to stay focused on economic coverage and the offer came to help with one of Reuters core economic beats, covering the Federal Reserve. It fit well my professional interests, with academic work I am pursuing, and I particularly like the company’s global footprint – the ability to collaborate with colleagues in the key economic capitals and elsewhere.

How was the transition from covering the world economy to covering the Fed?

Pretty seamless. The dollar is a global currency, the U.S. is the largest player, and the Fed’s decisions have international impact. As we’ve seen over the past few years as well, foreign events influence the Fed. You can’t cover the U.S. central bank without keeping an eye on the rest of the world.

How do you and Michael Flaherty split up the Fed beat?

We actually have a team of reporters covering the Fed. For example, Mike and I are based in DC. Jon Spicer is in New York, and Ann Saphir is based in San Francisco. It is a very collegial bunch. Mike and I are more board focused by virtue of location, and we alternate on a lot of the repeat business – who handle the minutes, or attends a given press conference.

Beyond that we’ve developed nicely complementary interests – he enjoys the politics of the Fed on Capitol Hill and the supervisory and regulatory issues…I enjoy watching and reporting on the macro trends and monetary policy stuff. By nature of the beat we kind of all have to watch everything, but we do gravitate toward different interests.

What are the biggest issues or hurdles in covering the Fed?

Access to the board is tough. The regional bank presidents each have their own rhythms for speaking in public, so we get time with them pretty regularly. But the board is a different beast: It’d be great if there was more regular access.

Do you think the Fed is serious about making itself more transparent to journalists, and to a larger degree, American citizens?

I think they are serious about it but also deliberate about balancing interests. In other words transparency is one value. Making effective policy is another. To consider an extreme, they would never allow real time public debate on monetary policy – imagine the market reaction if some of the debates we read in the transcripts were live on C-SPAN.

So it is a given that central banks will remain somewhat opaque. That being said, there are things they could do that would not be disruptive. More regular press conferences — even putting names to the currently anonymous forecasts that Fed officials make public on a quarterly basis would be a way for them to provide a bit more information about the process.

How do you prepare to cover an FOMC announcement?

Lots of prep work. We try to have a solid advance story to frame the meeting, and a couple of working drafts in hand that reflect likely outcomes. I am sure that is pretty much standard procedure across the media industry as well. We review as a team all the headlines generated by the last meeting, look carefully at where emphasis might shift, and have a lot prepared in advance. The outcomes are too time sensitive to do it all at the last minute.

How much of a push does Reuters make to get out to every speech made by a Fed governor? Do those add anything to coverage?

Generally if a governor is speaking we are there – and if they are in Europe or elsewhere we will draw on our other bureaus to help. There is a strong commitment to staying close to the ground on this – and really on all the major central banks. Likewise we try to be at as many of the public appearances by the regional bank presidents as well.

That’s out of recognition that the data are constantly changing, their views get updated, and slight shifts of tone and language can be important. That not only adds to the coverage – it in some ways is the coverage. Chair Yellen is influential, to be sure, but there is deliberation, and their individual views is what gets summed into a decision on meeting day.

How much is the Fed watched by international business journalists?

A ton – there are European and Asian correspondents in the lockup and a steady flow of Fed-watching notes from international analysts. In a dollarized world you ignore the Fed at your peril. Reuters has correspondents all over the world writing about how Fed news affects their respective patches.

A lot of people watch the Fed and are quoted in the business media as if they know what’s going on. With the Fed being so secretive, do they?

Many of the people who get quoted have some experience at the Fed – they have been on the inside as members or staffers, so do have some frame of reference. Do they have a line open to Janet Yellen or vice chair Stan Fischer? I doubt it. Can they to a certainty divine a particular decision? No.

Do they have standing to analyze or comment or project? Sure. Part of any Fed correspondent’s job is sorting through all that.