The wording of the directive was changed late last year to make it more transparent. Previously, it instructed the manager, for example, to tighten reserve positions slightly, somewhat or significantly. A "slight" increase in reserve positions was, in fact, code for a 25 basis point increase in the funds rate; "somewhat" of an increase was code for a 50 basis point increase; and a "significant" increase signaled a 75 basis point increase in November of 1994. Of course, the manager of the System Open Market Account attends the meeting and knows the vote was explicitly for a 25, 50, or 75 basis point increase. The revised practice is to report in the directive precisely the outcome of the vote—a 25 or 50 basis point increase or whatever. This is further progress in terms of transparency.
The directive also indicates whether there is a symmetric or asymmetric posture for policy by the use of "woulds" and "mights" in the discussion of possible adjustments to the federal funds rate in the period between meetings. For example, a symmetric policy would be indicated by the wording: "In the context of the committee's long-run objectives for price stability and sustainable economic growth and giving careful consideration to economic, financial and monetary developments, a slightly higher federal funds rate or a slightly lower federal funds rate might be acceptable in the intermeeting period." The symmetry is indicated by the use of slightly in this case with respect to both a higher and lower federal funds rate and by the use of might with respect to both options. Sometimes, but not lately, symmetric directives have used "would" instead of "might" to apply to both options. An asymmetric posture, with a greater likelihood of a rise in the federal funds rate than a decline, would be indicated by the wording: "a somewhat higher federal funds rate would and a slightly lower federal funds rate might be acceptable in the intermeeting period." The asymmetry is evidenced by the use of "would" in one case and "might" in the other, with the "would" indicating the direction that is more likely; and by using "somewhat" to describe the size of any increase and "slightly" to describe the size of any decline.