Federal Reserve Faux Pas

(AP)
BartinankeGate has likely come to an end where many of the 'Gates of our time often do – during a Senate hearing. In case you don't recall (and also because I'm pretty sure I just coined the term BartinankeGate) I'm referring to CNBC anchor Maria Bartiromo's scoop from Fed Chairman Ben Bernanke during the White House Correspondents' Dinner last month. Following Bernanke's testimony to Congress in April that the Fed might leave interest rates unchanged at an upcoming meeting, Bartiromo asked Bernanke at the WHCA dinner the following Saturday "whether the media and financial markets were right to think that he had signaled the Fed was done raising interest rates. 'He said, flatly, no,' she reported on her program at about 3:15 p.m. the following Monday, triggering a sharp drop in stock prices just before the market closed," according to The Washington Post.

After a whole lot of hoopla about that – Did he consider the conversation off-the-record? Did he do it on purpose because he knew she would report it? – Bernanke finally commented on the situation, telling a Senate committee yesterday that he made a "lapse in judgment" by discussing the matter with Bartiromo. The Post reports that Bernanke "acknowledged yesterday that the exchange was a mistake after Sen. Jim Bunning (R-Ky.) reminded the Fed chairman: 'I warned you to be careful about what you say because people are going to follow your words very closely.'" Bernanke told the committee: "In the future, my communications with the public and with the markets will be entirely through regular and formal channels."

Ah, well. Nobody's perfect. Even Alan Greenspan, as The Los Angeles Times notes today:

"Bernanke isn't the first freshly minted Fed chairman to give a television interview — and then admit to a faux pas.

Alan Greenspan appeared on ABC's "This Week With David Brinkley" program shortly after taking the central bank helm in August 1987. Stocks fell after Greenspan suggested on the program that inflation could become a problem if consumers and businesses thought it was inevitable.

Greenspan never granted another television interview on the economy during his 19-year term that ended in January — not even to his wife, NBC News reporter Andrea Mitchell."