Reply #65: Why Bernanke's Press Conference Matters

[DemReadingDU]

4/26/11 Why Bernanke's Press Conference Matters

Ben Bernanke's holding a press conference tomorrow. Why is everybody so worked up about it? Because everything the head of the Federal Reserve says is a big deal. One off-hand comment can send global markets soaring or plunging. And because Fed chairmen, as a general rule, don't give press conferences.

They release official statements that are very, very carefully worded. And they appear before Congress. Since the financial crisis, though, the Fed has come under increased scrutiny. The carefully worded statements and Congressional appearances weren't carrying the day.

So the leaders of the Fed have decided to send the chairman out for press conferences every few months ("to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication," in Fedspeak). The first one is tomorrow, at the end of a two-day policy meeting that starts today.

Remember, though: Investors hang on every word Bernanke says. And the last thing a Fed chairman wants to do is surprise the markets.

So Bernanke's goal at the press conference will likely be to answer the questions, while saying only what everyone already knows.

http://www.npr.org/blogs/money/2011/04/26/135711990/why-bernankes-press-conference-matters


4/25/11 Bernanke To Explain Fed's Action At News Conference
The Federal Reserve meets this week to discuss interest rates. David Wessel of The Wall Street Journal tells Steve Inskeep one thing different about the meeting is that Fed Chairman Ben Bernanke will hold his first news conference Wednesday.
http://www.npr.org/2011/04/25/135697195/bernanke-to-hold-first-news-conference
audio appx 4 minutes