Bernanke’s ‘gloomy’ language reflects slowing economy
JEREMY HOBSON: When the Fed chief speaks economists hang on every word looking for slight variations from what he’s said in the past. So when Chairman Ben Bernanke spoke at a press conference yesterday after the central bank’s big meeting in Washington, economists quickly zeroed in on his new tone. It was a little more downbeat than usual.
Marketplace’s Nancy Marshall Genzer is with us live, from Washington with the details. Good morning.
NANCY MARSHALL GENZER: Good morning.
HOBSON: So, Nancy, Ben Bernanke was kind of a downer about the economy yesterday.
MARSHALL GENZER: Yeah, Jeremy. The Fed chairman isn’t exactly the life of the party, but his statements yesterday were especially gloomy as you said. He said many factors were weighing on the economy. But he singled out a few things.
BEN BERNANKE: Consumer’s purchasing power has been dampened by higher food and energy prices. And the aftermath of the tragic earthquake and tsunami in Japan, has been associated with disruptions in global supply chains, especially in the auto sector.
And Jeremy Bernanke said part of the slowdown may be temporary especially as Japan recovers from that earthquake and tsunami.
HOBSON: Nancy, the Fed has been resisting concerns about inflation from a lot of economists saying that it’s not really that big of a deal right now. But in that clip you just played, he said he’s worried. How worried?
MARSHALL GENZER: Yeah, inflation is clearly on his mind. But the Fed does expect prices to subside, especially prices for commodities like oil. It’s raised its expectations a bit for core inflation – that is, prices for things other than food and energy. But Bernanke doesn’t seem overly concerned. One way the Fed contains inflation is to increase interest rates. And there’s no sign of that on the horizon. The Fed doesn’t want to make it more expensive to borrow money right now. That could lead to an even slower recovery, and yes an even gloomier Ben Bernanke.
HOBSON: Wouldn’t want to see that. Marketplace’s Nancy Marshall Genzer in Washington, thanks.
MARSHALL GENZER: You’re welcome.
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