Jerome Powell leans into greater openness

In one of his final speeches before a big policy meeting this month, Fed Chair Jerome Powell gave another hint that a rate cut is coming and stressed the importance of communicating frankly with the public.

Why it matters: The financial markets may have backed Powell into a corner to cut interest rates, but these days Main Street has his ear, too.

• In a novel series of public forums held the past few months, community leaders across the country have told Fed officials about the unevenness of the economic recovery.
• Since the latest "Fed Listens" event in Chicago, Powell has referenced this grassroots feedback in nearly every single public appearance to underscore the importance of extending the record-long economic recovery.

What he's saying:

Gone are the days when the Federal Reserve Chair could joke, as my predecessor Alan Greenspan did, "If I turn out to be particularly clear, you've probably misunderstood what I said." Central banks must speak to Main Street, as well as Wall Street, in ways we have not in the past, and Main Street is listening and engaged.

The big picture: Powell, who is more plainspoken than his predecessors, has emphasized the importance of forthright communication since he took the helm of the Fed. He has doubled the number of post-policy meeting press conferences, and, under his direction, the Fed is for the first time publicly reviewing the way it communicates — among other things — to carry out its mandates.

• Powell has picked up on "the strong sense of transparency" carried out by Janet Yellen and Ben Bernanke, former Fed economist Jeffrey Bergstrand tells Axios.

• Yes, but: Powell hasn’t been without his own communication missteps. He "gives a little bit more color than his predecessors, and sometimes that can be risky," says Michael Reynolds of investment management firm Glenmede Trust. "There were slip-ups like, 'we're a long way from neutral.'"

The bottom line: In the midst of the longest expansion on record, the central bank is about to make a move that is normally done only in dire economic situations. This will leave the Fed with less flexibility if a recession does come — setting up a situation in which communication is more important than ever.

• "Powell has done a good job conveying they are pursuing a little bit of insurance," says Bergstrand.

Go deeper: The case for a Fed rate cut