27th April 2011
In the past, the reluctance of the Fed to meet the press has made the Bank of England and its Governor Mervyn King seem positively chatty.
From tomorrow, the Fed will give four press conferences a year with the particular emphasis on monetary policy, with the financial media and markets hanging on every word. Prior to this Bernanke has spoken to individual newspapers and given the occasional TV interview, as well as testifying to the US Congress, but this is the Fed's first formal press conference.
Here is the Huffington Post's take on the significance of tomorrow.
It says: "[Benanke] will be directly grilled by the folks some regard as the toughest questioners of all, in the central bank's first ever press conference after a committee meeting. He will submit to a pack of reporters jockeying with one another for a shot at provoking news from the chairman. It's the Fed's most significant bid ever for transparency and accountability, and the consequences of a mistake could be dire."
The US blogosphere is abuzz with speculation about what may happen tomorrow.
Here website the Stock Enthusiast wonders if the conference is really such a good idea.
Meanwhile US economist Barry Ritholtz's blog site the Big Picture suggests ten questions that should, but probably won't, be put to the chairman.
In Mindful Money's opinion the following are Ritholtz's two best questions certainly if you are an investor in the rest of the world.
"2) How much of the current oil price do you think is real and how much is speculation? And do you think the Fed's zero interest rate policy (ZIRP) is having any impact on the price of commodities, especially food and oil?"
"3) You missed the housing bubble and misread systemic leverage so what do you fear today that you may be missing and getting wrong?"
Interestingly, Ritholtz doesn't ask for Bernanke's opinion of rating agency Standard &Poor's recent decision to put US debt on a negative outlook. Perhaps that is implied by another question about who will buy US Treasuries after the end of quantitative easing.
The Big Picture says it expects a bit of a non-event, but Mindful Money will keep you posted.
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