Image caption Federal Reserve chairman Ben Bernanke has argued for greater transparency at the central bank

The US Federal Reserve has said it will publish regular interest rate forecasts in an effort to improve transparency at the central bank.

It means the public will be given an indication of how the Fed thinks rates will move for years into the future.

The news was revealed in the minutes of the Fed's 13 December Federal Open Market Committee meeting.

The information on interest rates will be incorporated into its economic outlooks, starting on 25 January.

"The Fed took a giant step towards enhancing the clarity and transparency of monetary policy by agreeing to include explicit interest rate forecasts in its quarterly projections," said Paul Edelstein from consultancy IHS Global Insight.

Transparency

Up until now the Fed's statements have only provided vague statements as to long-term rate movements.

The bank's current guidance, for example, suggests rates will stay low "through mid-2013".

Instead the bank will now publish detailed forecasts from each member of its 17-member rate setting committee.

"The SEP will include information about participants' projections of the appropriate level of the target federal funds rate in the fourth quarter of the current year and the next few calendar years, and over the longer run," said the committee's minutes.

Committee members will also predict when they expect rates to rise.

The interest rate forecasts will be closely watched by markets keen to gauge the impact of rates on the world's largest economy.

If the detailed information suggests rates could stay lower for longer than currently expected it could help reduce long-term borrowing costs for homes and businesses.

Mortgages

The first set of data will be published in the Summery of Economic Projections (SEP) later this month.

Homeowners will also monitor the predictions because of the implications for investments and mortgages.

The bank is likely to change its predictions frequently as economic circumstances vary.

Concerns were raised at the Fed meeting that the public may interpret the central bank's forecasts as concrete policy, potentially taking risky decisions on that basis.

However, the committee decided, these risks would be "manageable".

The unexpected decision may not be the last change to the Fed's communications policy.

The committee also discussed a "draft statement of the committee's longer run goals and policy strategy", to be discussed in January.