The Federal Open Market Committee is reconsidering how it indicates whether it is leaning toward higher or lower interest rates.

To conduct the review, Federal Reserve Board Chairman Alan Greenspan formed a subcommittee at the panel's Aug. 24 meeting, according to a summary of the meeting released Thursday. Mr. Greenspan told his fellow FOMC members that the directives, as the announcements are known, are subject to "differing interpretations."

The subcommittee will "review the wording of the directive, its meaning, and what the committee announces shortly after its meetings,'' according to the summary.

Fed Vice Chairman Roger Ferguson will lead the Working Group on the Directive and Disclosure Policy. Its six other members include the rest of the Fed board and the presidents of the Federal Reserve banks of Chicago, San Francisco, and St. Louis.

"While the committee did not contemplate retreating from its policy of immediate announcements, it might want to examine whether some adjustment in its procedures would be helpful," according to the summary.

Mr. Greenspan said he expected the subcommittee to make its "recommendations or at least some alternatives for committee consideration" by next spring.

On Feb. 3 the FOMC decided to augment its interest rate decisions with statements indicating future moves. The move has drawn mixed reviews, ranging from praise for additional openness by the central bank to criticism that the statements increase financial market volatility.

-- Barbara A. Rehm

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