Bernanke to hold news conferences 4 times a year
Thursday, March 24, 2011; 3:32 PM
WASHINGTON -- Federal Reserve Chairman Ben Bernanke will begin holding news conferences four times a year to explain the Federal Reserve's interest rate decisions and its views on the economy.
The decision announced Thursday comes after the Fed held an unusual videoconference last fall in large part to discuss the need to improve its communications strategy. A Fed committee also had been studying whether to begin holding periodic news conferences.
Bernanke's first news conference will take place after the Fed's April 27 meeting. That will augment the current communications strategy: a brief statement released after each of the Fed's eight policy-making meetings with no officials available to answer questions.
The central bank has come under criticism, primarily from Republicans, for being too secretive and failing to provide timely information on its actions during the financial crisis which hit in the fall of 2008.
"The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communications," the Fed said in a brief announcement of the decision.
The statement said the Fed would continue to review its communications practices "in the interest of ensuring accountability and increasing public understanding."
The decision to hold news conferences after meetings of its Federal Open Market Committee is a notable change. Until 1994, the Fed did not even announce the outcome of those discussions. Wall Street investment houses employed an army of "Fed watchers" who would monitor the Fed's daily actions in the bond market to search for clues as to whether the Fed was raising or lowering interest rates.
The Fed began issuing statements at the end of every FOMC meeting in 1999. Between 1994 and 1999, it only issued a statement if the Fed had changed its key interest rate.
Fed chairmen have rarely held press conferences and Bernanke's sessions will be the first regularly scheduled news conferences. There's also some risk to Bernanke taking questions. His words are closely watched by investors and have the potential to greatly move markets.