Tracking Bernanke

Wednesday, June 07, 2006 | 11:00 AM

Kudos to Liz Rappaport, the Markets Columnist at, 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:

Bouncing Bernanke:
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
  • "A leveling out or a modest softening of housing activity seems more likely than a sharp contraction."
  • Not worried about the inverted yield curve -- low long-term rates will keep the economy moving.
  • The policy response to inflation need not be as great as in the '70s, even with the move in energy prices.
  • Not worried about the current account deficit, but would be concerned if it changed too rapidly.
  • Mixed
    March 20: Speech, Economic Club of New York
  • "I would not interpret the currently very flat yield curve as indicating a significant economic slowdown to come, for several reasons."
  • "To the extent that the recent behavior of long-term rates reflects a declining term premium, the policy rate associated with a given degree of financial stimulus will be higher than usual. But to the extent that long-term rates have been influenced by macroeconomic conditions, including such factors as trends in global saving and investment, the required policy rate will be lower."
  • 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
  • "At some point in the future the Committee may decide to take no action at one or more meetings in the interest of allowing more time to receive information relevant to the outlook."
  • "Significant uncertainty attends the outlook for housing, and the risk exists that a slowdown more pronounced than we currently expect could prove a drag on growth this year and next."
  • Dovish
    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
    June 5:
  • "core inflation...has reached a level that, if sustained, would be at or above the upper end of the range that many economists, including myself, would consider consistent with price stability and the promotion of maximum long-run growth."
  • "Some survey-based measures of longer-term inflation expectations have edged up, on net, in recent months, as has the compensation for inflation and inflation risk implied by yields on nominal and inflation-indexed government debt."
  • (Super) Hawk
    Source: FOMC Web site;



    The entire column can be seen here.

    Nice work, Liz!


    Market Suffers From Too Much Information
    Liz Rappaport, Markets Columnist
    The, 6/5/2006 5:43 PM EDT

    Wednesday, June 07, 2006 | 11:00 AM | Permalink | Comments (16) | TrackBack (1) add to | digg digg this! | technorati add to technorati | email email this post



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    » Fed Watch: Ascendancy of the Hawks from Economist's View
    Here is Tim Duy's latest Fed Watch: Ascendancy of the Hawks, by Tim Duy: My time of capitulation has come. After the weak labor report, I would have thought a pause in at the next meeting a sure thing and [Read More]

    Tracked on Jun 11, 2006 7:07:41 PM


    It's too late. Too many people know him for his 2002 "helicopter" comment and will hold that up against him for his entire tenure.

    If confidence was what the market wanted, Bush picked the wrong guy.

    Posted by: Uncle Jack | Jun 7, 2006 1:18:47 PM

    The comments to this entry are closed.

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