Bernanke embraces glasnost
Jeremy Hobson: This week could be the week the Fed changes directions. Ever since the financial crisis the Central Bank has been trying to make money as easy as possible to get — cutting interest rates, printing money, and buying up mortgages to boost home-buying.
Well tomorrow Federal Reserve Officials will meet and for the first time they’re expected to signal an end to monetary loosening and a beginning to monetary tightening. And on Wednesday, Fed Chairman Ben Bernanke will do something no other Fed chairman has done. He’ll hold the first of several news conferences.
Marketplace’s David Gura has more from Washington.
David Gura: Expect to see Bernanke trying to explain monetary policy to the rest of us.
Kevin Jacques: And the hope is that the American public will gain faith in the Federal Reserve, and that would be beneficial to the economy and to our financial markets.
That’s Kevin Jacques, who teaches finance at Baldwin-Wallace College. Some Americans lost confidence in the Fed during the financial meltdown, and life hasn’t gotten easier for Bernanke, says James Gentry, a communications professor at the University of Kansas.
James Gentry: He’s already been dealing some total economic illiterates who happen to reside in the House of Representatives and the Senate of the United States.
In the past, the Fed hasn’t been too transparent. When Alan Greenspan spoke, everyone listened. But who understood a word he said? Gentry has a tip for Bernanke.
Gentry: My advice would be just to try to make it as simple as possible.
But with economic policy, that may be easier said than done.
In Washington, I’m David Gura for Marketplace.
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