In an unprecedented move, the Fed announced that Ben Bernanke will begin holding “regular press conferences to better explain monetary policy to the US public and financial markets.” Heretofore, Fed Heads have been exempted from having to answer questions from the bourgeoisie.
Contrast that with US presidents, who, on a regular basis, have had to deal the likes of the Helen Thomas and the late Sam Donaldson, both of which hounded presidents mercilessly.
Since the Fed’s inception, Fed Heads have been treated more like deity than public officials. Japan’s emperor, for example, has never been seen in public. He is called the Tennō in Japanese, which literally meaning “heavenly sovereign.” Comparably, Fed heads are rarely seen in public, there having been only four Fed Head press conferences.
Ben Bernanke held two, one last month in Washington and one in February 2009. The February 2009 briefing was to defend Fed policies at the start of the financial crisis; the one last month was to present the Fed’s vision for the economy.
Alan Greenspan, who was dubbed the “maestro” because of his supposedly magnificent “handling of the economy,” held one in 1992, during another recession.
Paul Volcker held one in 1979. I don’t know what Volcker said in this press conference, but since it was 1979 and he had just been anointed Fed Head during the worst inflationary period the US had ever experienced, I suspect he told the world that he was going to shut down inflation, which he did.
While the Tennō is never seen in public, Fed Heads show up only during crises.
Present plans call for Bernanke to address the media at the conclusion of four of the eight yearly meeting of the Federal Open Market Committee, which sets Fed interest rate objectives. The news briefings are “intended to further enhance the clarity and timeliness of the Federal Reserve’s monetary policy communication.” In other words, the Fed intends to publicly defend its actions.
The decision to hold news conferences is a notable change. Until 1994, the Fed did not even announce the outcome of its FMOC discussions. Wall Street investment houses employed an army of “Fed watchers” who would monitor the Fed’s daily actions in the bond market to search for clues as to whether the Fed was raising or lowering interest rates.
The Fed began issuing statements at the end of every FOMC meeting in 1999. Between 1994 and 1999, it only issued a statement if the Fed had changed its key interest rate.
I suspect these press conferences will be limited to only select members of the media. Ron Paul will NOT be invited.
