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Fallout: The Financial Crisis

Central bankers mull recovery at retreat

Amy Scott Aug 21, 2009
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Fallout: The Financial Crisis

Central bankers mull recovery at retreat

Amy Scott Aug 21, 2009
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TEXT OF INTERVIEW

Bill Radke: Central bankers and other economic heavy hitters are gathered in Jackson Hole, Wyo., this morning. Fed Chairman Ben Bernanke kicked off the day’s session with a much-anticipated speech. Marketplace’s Amy Scott got herself a copy. She joins us live. Good morning.

Amy Scott: Good morning.

Radke: What did the Fed chair have to say?

Scott: Well the theme of the speech was “Reflections on a Year in Crisis.” When these folks gathered in Jackson Hole last year, of course Lehman Brothers was just a few weeks away from collapse. So a lot of the speech looked back at the events of the year and the Fed’s response. Bernanke defended the bailout of AIG and the decision not to rescue Lehman Brothers. There was also a little bit of self-congratulation. He praised policymakers around the world for responding with speed and force to avert a deeper crisis. Bernanke’s term as Fed chair expires in January, so presumably some of this is about marketing himself.

Radke: And what did he say about where the economy’s headed now?

Scott: He said more of what he’s been saying lately, which is that the economy is leveling out, but that it remains weak. What he didn’t say, which I know will disappoint some of the economists I’ve been talking to, is much about the Fed’s exit strategy. That is, after all this money has been pumped into the system, how it plans on taking that away to fight off future inflation.

Radke: Right. Now this gathering, Amy, is at a resort in Jackson Hole, at the foot of the Grand Tetons. And I’ve been there. It’s mighty pretty.

Scott: I know.

Radke: Are they getting stuff done there?

Scott: Well there will apparently be some hiking, some trips into Yellowstone National Park. But I’m told they’ll also be spending some time holed up in conference rooms, wrestling with ideas like how to walk that line between economic growth and inflation, and also how to regulate the system so this doesn’t happen again.

Radke: Marketplace’s Amy Scott, thank you.

Scott: Thank you.

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