Today's guest post is by Peppercommer, and RepChatter Co-host, Brendan Mullin.
Perhaps it’s no coincidence that Fed Chairman Ben Bernanke has declared he will hold quarterly press conferences during our current Great Recession much like President Roosevelt launched his fireside chats in March 1933 during the Great Depression. Then, FDR sought to connect with Americans to discuss complicated issues and reassure depressed countrymen that brighter days were ahead. Ironically, in his first fireside chat, FDR spoke to the nation about banking and why so many banks had failed. Sound familiar?
While everyone is for more transparency – and make no mistake that is what this move is intended to symbolize – many wonder if it is enough or if it will even work.
Dow Jones managing editor Neal Lipschutz wrote recently that he believes Bernanke has the right personality to handle the pressure of open communications but wishes there would be more than just four “meet the press” moments during the year for the chief banker (note: “Fed chief” and “personality” are as closely linked as “Britney Spears” and “class”).
Others have made the argument it’s just not necessary as the Fed’s monetary policy is already parsed to extremes. As we’ve seen the last few years in particular the markets hang on the Fed’s every word. Will we now see wild market swings based simply on Bernanke’s non-verbals!?
It ought to be interesting (or comical) to see the pundits analyze Bernanke’s look and style during his April 27th inaugural press conference as much as the substance on which he speaks. And, I can envision Bernanke’s flack instructing him on the eve of the press conference, “Remember Ben, dark suit, white shirt, solid tie. Oh, and be sure to sit on your coat tails.”
Kidding aside, disclosures and transparency on monetary policy and global economic realities are very serious matters. I just hope the concept – or experiment – of a “press conference” is genuinely meant to be more open about the fiscal decisions the Fed make. And yes, I’m talking about those decisions that have profound effects on the markets, and directly impact everyday citizens who, knowingly or not, are participants in the very delicate economic conditions the Fed seeks to monitor and maintain.
Maybe Bernanke & Co. did listen to FDR’s first fireside chat and believed it when he said, “After all there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people.” As we wait for curtain to rise on Bernanke’s first press conference later this month, for Ben’s sake, let’s hope FDR was also right when he said, “We have nothing to fear except fear itself.”
Get your popcorn ready.