The Fed’s Ben Bernanke, de-mystified

“It used to be that the mystique of central banking was all about not letting anybody know what you were doing,” he said.

© AFP Jim Watson

AFP

WASHINGTON (AFP) – His voice cracked and pinched. When necessary — most of the time — he retreated into policy jargon.

With markets ready to pounce on any odd choice of words, US central bank chief Ben Bernanke was clearly nervous as he fielded reporters’ questions after a policy meeting for the first time Wednesday.

And while the markets did react — stocks jumped, the dollar dropped, and gold soared — Bernanke probably succeeded in what he set out to do: putting a human face on the Federal Reserve while not making much news.

Wearing a checked red tie, looking appropriately professorial behind a broad wooden desk rather than Washington’s more common power-stance — the bearded, balding former Princeton economist said the Fed wanted to give more transparency and accountability. To give “color and context” to its data.

And probably to rebuff politicians who use it as a punching bag with little reference to what the central bank can and cannot do in America’s worst downturn in eight decades.

“It used to be that the mystique of central banking was all about not letting anybody know what you were doing,” he said.

“And so we have become, I think, a very transparent central bank.”

There was clearly an audience: aside from the 60-odd reporters jammed in the room, the press conference was broadcast live on several cable channels and about 15,000 watched it direct on line.

It was not clear how many would understand phrases like “highly accommodative monetary policy” and explanations like: “It should be noted that estimates of these rates are inherently uncertain and subject to revision over time.”

The press conference, the first time in all its 97 years that the Fed had met the media following a policy-making session, didn’t give up much news.

Most of what the central bank truly had to say had been published in a statement two hours earlier, already picked clean and divined by economists and analysts.

And it had already released its forecasts for growth (lower than expected), inflation (higher), and jobs (better).

Bernanke’s thick rhetoric was perhaps unavoidable, this being the Federal Reserve.

But he was clearly more chummy than his predecessor.

The legendarily confident Alan Greenspan had little time for anyone questioning his economic smarts, which took the country through an unprecedented boom, and then straight into the two busts of the 2000s.

Bernanke clearly doesn’t see himself as a political figure.

But asked political questions — about how the Fed could help with the big problems facing Americans, on skyrocketing gasoline prices and a dismal jobs market — he tried to give a more earth-bound explanation.

“The pace of improvement is still quite slow, we are digging ourselves out of quite a big hole,” he explained.

“It’s very hard to blame the American public for being impatient”

But when pushed, he had no real answers.

– “There’s not much the Federal Reserve can do about gas prices per se.”

– “We don’t have any tools for targeting long-term unemployment specifically.”

So, like many a Fed statement, there were more questions to ask than really answered.

Even so, there was clearly a geek star-is-emerging quality about the whole thing.

“Still waiting for someone to ask, ‘Who are you wearing?'”, tweeted USA Today personal finance reporter Sandy Block.

© AFP — Published at Activist Post with license