Photo: Federal Reserve
We already got the policy statement from the Fed, which many are interpreting as somewhat on the dovish side.Now comes the press conference from Bernanke, the first in the Fed’s history.
It’s expected to last 45 minutes, starting at 2:15 ET.
You can watch a live stream here.
We’ll be covering key highlights LIVE.
The Bernanke Press conference is beginning.
He’s just going over the previous announcement, and the current economic projections. You can see the new economic projections here. GDP forecast for 2011 has been revised down to 3.1% to 3.3% from a prior range of 3.4% to 3.9%.
Still going over projections. Kind of snoozy.
Impact of commodity inflation will be transitory.
He really isn’t saying much of anything. It’s like an earnings call, where the management wastes a bunch of time.
Q: Why has growth been so weak?
A: We haven’t seen tomorrow’s numbers, but we think it’s “transitory.” defence spending has been transitory. Weaker exports should not persist. But weaker construction is a problem.
Q: How long will you keep the extraordinary measures?
A: No answer. Really playing it close to th evest.
Q: Steve Liesman embarrasses himself “big time” saying that this is a “tremendous development.” He asks about the dollar.
A: Bernanke isn’t saying anything.
Q: Hilsenrath asks about gas/food prices.
A: Bernanke: Yes, high gas prices are creating financial hardship. Higher gas prices/higher oil prices also make economic headwinds. All that being said, higher prices are the result of increased demand, coming from emerging markets. The Fed Can’t Create More Oil!
Q: Unemployment questions.
A: “The pace of improvement is still quite slow.”
Q: What will happen to the economy, etc. when QE ends?
A: As I said, we are going to end the program, without tapering. Our view is that based on past experience, the end of the program is unlikely to have significant effects on financial markets or the economy.
Q: What positive effects can you point to about QE2? And if it has been good, how can we afford to end it?
A: The second round was effective as we saw in financial markets (e.g., stocks went up). As for why not doing more? The tradeoffs getting less attractive. “It’s not clear that we can get substantial improvements in payrolls without additional inflation risk.”
Q: On long-term unemployment. Can you actually fix it a the Fed?
A: No answer.
Q: Question about debt and S&P.
A: In one sense, S&P’s action didn’t really tell us anything. “It’s the most important long-term problem that the United States faces.”
Q: Congress appears to be intent to cut spending, following the direction in Britain. Is there anything the Fed can/should do in response?
A: The cuts that have made so far don’t seem to have any indication of hampering economic activity. If the changes are long-term, it’s OK. But if the changes are all short-term, the Fed MIGHT make a change to its priorities.
Things are wrapping up, and getting really slow here. Talking about Japan threats a little.
Q: Another dollar question…
A: No real answer.
Q: Question from Ken Rogoff! Are people expecting too much from the Fed given the unique nature of post-crisis recessions.?
A: Not much of an answer. A joke about losing at chess to Ken Rogoff.
Press conference over.