Now that Big Ben has chimed in at his first-ever news conference, what did we learn?
Not much — not, that is, if you were hoping he would make news or at least an errant remark.
Federal Reserve Chairman Ben Bernanke was poised, articulate and thoughtful in the first news conference ever called by a Fed chairman. His briefing was an Econ 101 class for the nation.
Before the briefing began, the Fed announced that its $600 billion program to buy Treasury securities — known as qualitative easing, or QE2 — would end as planned in June. Economists have given the program mixed reviews. While Fed action has kept interest rates low, pumped up the stock market, reduced the cost of American exports and allowed companies to borrow at low rates, most Americans didn’t get any more wind in their sails as a result. Unemployment stood at 8.8 percent in March.
Many companies continue to sit on big piles of cash and aren’t willing to invest or hire. Until more of those businesses see enough demand to justify hiring, the economy will remain sluggish.
The question now is whether the Fed should do more about stubbornly high unemployment. Bernanke seemed to be saying that it won’t — or can’t — especially as signs of inflation reappear in the economy. For the average viewer, Bernanke’s news conference was about as interesting as watching paint dry. But even so, it was worthwhile. As Bernanke noted, just a few years ago, the Fed didn’t even announce when it had changed interest rates.
Bernanke’s decision to hold quarterly news conferences is a welcome step toward a more transparent central bank.
The Times, Shreveport, La. (May 5)