When The Fed Chair Speaks, Try Not To Freak
These are among the quirkier indicators that Wall Street and those who reported on it used to determine what the ever-cryptic former chairman of the Federal Reserve, Alan Greenspan, might say about the markets. And his successor, Ben Bernanke, learned pretty early on in his tenure the danger of saying too much. Back in May, CNBC's Maria Bartiromo reported on the network that she had spoken with Bernanke at the White House Correspondents Dinner, and he had told her that the markets had misinterpreted his testimony to Congress that indicated the Fed was done raising interest rates. And, predictably, no sooner had the words escaped her lips on TV, the market freaked. Bernanke later told a Senate committee that his comments were a "lapse in judgment."
But, as The Wall Street Journal reports today, that doesn't mean that Bernanke is going to start getting cryptic. Actually, he'd like to make the Fed a bit more user-friendly. Writes the Journal: "The new chairman is trying to depersonalize the Fed by making its decision-making more democratic and easier to understand," adding that "His plan is for the Fed to be more clear about its goals and expectations for inflation and economic growth so the markets don't react so much to his every utterance."
Of course, that doesn't mean more media appearances.
"In Mr. Bernanke's view, making the Fed more 'transparent' doesn't mean talking more, but providing more systematic, specific information, in particular about the Fed's goals -- such as for the inflation rate -- and forecasts."