Bernanke Meets the Press in a First for US Central Bank
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This is the VOA Special English Economics Report.
Central bankers have to choose their words carefully. So they often say little in public -- or little that makes sense. But the United States central bank says it is trying to be more clear and timely in communicating its policies.
The latest example: a press conference by Chairman Ben Bernanke. Wednesday's event was the first of its kind in the ninety-eight-year history of the Federal Reserve.
In his opening comments. Mr. Bernanke explained a decision by the Federal Open Market Committee to leave its main short-term interest rate near zero. The committee had just completed a two-day meeting.
BEN BERNANKE: "The committee continues to anticipate that the economic conditions -- including low rates of resource utilization, subdued inflation trends and stable inflation expectations -- are likely to warrant exceptionally low levels for the federal funds rate for an extended period."
In other words, the economy is not growing fast enough to worry about inflation. A reporter asked what an "extended period" means to the Fed. Mr. Bernanke said it suggests "a couple of meetings probably" but it all depends on the economy.
The chairman said it is very hard to blame the American public for being impatient with the speed of the recovery. But he pointed out that unemployment is still high -- 8.8 percent in March. Oil and gasoline prices are high. And the housing market remains very weak.
The committee said it will complete purchases of six hundred billion dollars in Treasury securities in June. The Fed launched the bond buying program late last year in an effort to keep interest rates low and strengthen the economy.
Some economists say this second round of what is known as quantitative easing, or "QE2," has not been effective. Mr. Bernanke disagreed and pointed to examples like gains in stock prices.
The Fed has two main goals for its monetary policy: the highest possible employment rates and stable prices. The bank faced criticism for intervening either too little to some critics or too much to others in the financial crisis.
The press conference produced no surprises. Yet, as recently as the middle of the nineteen nineties, the Fed did not even release its decisions or its interest rate targets to the public.
Today the Fed is trying to reach out to Americans through ways like this video on its website.
BEN BERNANKE: "Hi, I'm Ben Bernanke, chairman of the Federal Reserve System. The Fed, as it's often called, is the central bank of the United States … "
The Fed announced in March that Mr. Bernanke will hold four press briefings a year. The next of three planned for this year will follow a decision on interest rates in June.
And that’s the VOA Special English Economics Report. I’m Mario Ritter.
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Contributing: Mil Arcega