Ben, I already miss you!
Federal Reserve Chairman Ben Bernanke, who on Wednesday held his last scheduled news conference after the Fed announced it will scale back on bond buying.
It’s called a “driveway moment.” You’ve arrived home, but you’re so engrossed in a radio story – usually on public radio – that you can’t leave your car until it ends.
I had such a moment today in my office parking lot, compliments of an unlikely storyteller: Federal Reserve chairman Ben Bernanke. His swan song news conference featured him at his human best: Clearly explaining the arcana of monetary policy, showing empathy for Americans whose lives are recovering even slower than the economy itself, and deftly marketing one of the Fed’s most anticipated decisions since the end of the financial crisis.
The Fed had just announced it would begin curtailing its bond-buying, a form of economic stimulus that has kept interest rates low and stock prices high. Investors had fretted about this day for months. But as Bernanke spoke, markets soared. This time, investors got his message: Look beyond the tapering of bond purchases, the Fed will keep short-term interest rates near zero until “well after” the unemployment rate drops to 6.5 percent. That level is a threshold, he said, not an automatic trigger. The stimulus lives on.
But it wasn’t the economic prescription or the soaring stock prices that made Bernanke, shall we say, good radio. It was his authority, clarity and wit. He graciously countered reporters’ suggestions that the Fed had failed or was abandoning its aggressive policies to prod the economy. When a network television reporter asked him why he wasn’t considering injecting “more direct” stimulus, Bernanke called her bluff. What sort of stimulus did she have in mind, he asked. The reporter offered a meek reply, and Bernanke proceeded to give a primer on what the Fed can and can’t do.
He flashed his diplomatic wit when asked what advice he has given his presumed successor, Janet Yellen, about how to deal with Congress. Some Fed skeptics on the Hill are threatening to “audit” the central bank and try to clip its powerful wings. Very good question, he said after a pause. Without the benefit of TV, I pictured Bernanke suppressing a smile. Then he said he reminded Yellen that “Congress is our boss.” Another smile suppressed, perhaps.
Quarterly news conferences were among Bernanke’s innovations at the Fed. He certainly had small shoes to fill in terms of communications skills. When Alan Greenspan spoke, the average American cringed. Bernanke had his missteps too, but his avuncular demeanor, professor’s precision and self-deprecating wit during a period of crisis have set a high bar for Yellen.
And a new standard for a driveway moment -- provided by the fusty Fed.