And if that title didn’t scare you, please be aware that the embedded video, which is nearly an hour long, begins with almost exactly 10 minutes of dead air. So do yourself a favor and skip ahead.
This is an historic event: the first-ever press conference by the Fed chairman about a meeting of the Fed Open Market Committee.
It may not be exciting, but I think it’s important in many respects. Bernanke — and obviously his predecessor Alan Greenspan — did a terrible job foreseeing the financial crisis and other fallout from the housing bust, but I think Bernanke has done a pretty good job managing what he can since then. The problem now, I think, is that there has been more concern about inflation than about employment (those are the twin mandates of the Federal Reserve).
There were concerns that Bernanke might say something that would trigger nervousness in the markets, but he’s a good clear speaker — one who goes into detail, and is not afraid to challenge, very politely, the assumptions of some questions. There don’t seem to be any surprises here, although the Fed has moderately altered a few of its forecasts: short-run inflation projections are up slightly but little changed beyond this year, employment is improving “moderately,” GDP is forecast to continue to grow (so no double dip), albeit only slightly more quickly than the trend growth line.
So the Fed will maintain a “highly accomodative monetary policy,” i.e. low interest rates and no change to the plans to unwind QE2.
A few extended quotations can be found here at Calculated Risk.
This was no attempt to justify the work of the Fed, and it obviously won’t satisfy critics of centralized monetary policy like Ron Paul. It’s just a good clear presentation of the economy viewed through the prism of the Fed.
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