Kudos to Liz Rappaport, the Markets Columnist at TheStreet.com, for putting together a terrific column on the flip flops of Fed Chair Ben Bernanke.
Here’s a chart of gentle Ben’s public statements that she put together:
A brief history of the new Fed chairman’s communication efforts
|Event||Key Comment(s)||Perceived as Hawk or Dove|
|Nov. 16: Confirmation Hearing, Senate Banking Committee||"In 2003, there was an episode where there was clearly miscommunication between the Federal Reserve and the bond markets
[regarding deflation risks]
, and it caused a significant fluctuation in the bond markets. Clearly there was a misunderstanding about that risk."
|Hawk, or at least attempt to dispel dovish perception.|
|Feb. 15-16: Semiannual report to Congress||
|March 20: Speech, Economic Club of New York||
||Mixed, but interpreted as somewhat hawkish.|
|March 28: FOMC Statement||"Possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures."||Hawkish|
|April 18: Minutes of March FOMC meeting.||"Most members thought that the end of the tightening process was likely to be near, and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy."||Dovish|
|April 27: Testimony, Joint Economic Committee||
|April 29: White House Correspondence Dinner||Tells CNBC reporter markets were "wrong" to react to his congressional testimony as necessarily telegraphing a pause. Bernanke says it’s "worrisome" people don’t see him as an "aggressive inflation fighter."||(Chicken) Hawk|
|May 10: FOMC meeting||"The Committee judges that some further policy firming may yet be needed to address inflation risks but emphasizes that the extent and timing of any such firming will depend importantly on the evolution of the economic outlook as implied by incoming information."||Not as dovish as traders hoped.|
|May 23: Q&A, Senate Banking Committee||CNBC episode was "a lapse in judgment on my part."||Maria Culpa|
|May 31: Minutes May FOMC Meeting||"…a number of factors augmenting the upside risks to inflation." Plus, FOMC considers 50 basis points.||Hawkish|
|Source: FOMC Web site; TheStreet.com|
The entire column can be seen here.
Nice work, Liz!
Market Suffers From Too Much Information
Liz Rappaport, Markets Columnist
The Street.com, 6/5/2006 5:43 PM EDT