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In first press conference, Fed chief Bernanke delivers upbeat news like a star

Federal Reserve Chairman Ben Bernanke held his first news conference Wednesday at the Federal Reserve in Washington. Dana Saporta, an economist at Credit Suisse, said of his talk: “I would give the chairman high grades for his performance today. I was a little relieved.”

Associated Press

Federal Reserve Chairman Ben Bernanke held his first news conference Wednesday at the Federal Reserve in Washington. Dana Saporta, an economist at Credit Suisse, said of his talk: “I would give the chairman high grades for his performance today. I was a little relieved.”

WASHINGTON — The script was repetitive. The lines were delivered without emotion. There wasn't even a twist.

The reviews for Federal Reserve Chairman Ben Bernanke's unusual news conference Wednesday would have sunk a Hollywood blockbuster. As the head of the famously vague central bank, though, he nailed it.

"I would give the chairman high grades for his performance today," said Dana Saporta, an economist at Credit Suisse. "I was a little relieved."

In an hourlong give-and-take with reporters — the first news conference by a Fed chief in almost 20 years — a relaxed Bernanke delivered little new information and said nothing to spook investors, who were hanging on every word.

"We paid attention," said David Ader, head of government bond strategy at CRT Capital. "But he didn't say anything we hadn't heard already."

Financial news channels pasted second-by-second charts of financial markets on the screen next to Bernanke's face as he spoke. For Fed watchers, there were a couple of morsels. Bernanke decoded his frequent pledge to keep interest rates near zero for "an extended period." He indicated rates would stay at the record lows for at least the next two Fed meetings, or about three months.

He also seemed to rule out further major efforts to help the economy. Shortly before Bernanke started talking, the central bank announced that its $600 billion plan to hold down interest rates by buying government bonds would end as scheduled in June.

He said the news conference was a step toward his goal of making the Fed more open and accountable to the American public.

Fed chairmen had held press conferences only twice before. Paul Volcker had one in 1979, shortly after he was appointed by President Jimmy Carter, and Alan Greenspan held an impromptu session with reporters in 1992.

Bernanke has taken openness to levels unthinkable under his predecessor, Greenspan, who tended to make opaque comments that Wall Street parsed word for word, as though he were an oracle.

On Wednesday, Bernanke sketched a picture of an economy growing steadily but still weighed down by prolonged unemployment, now at 8.8 percent. He noted that about 45 percent of the unemployed have been without a job for six months or longer.

"We know the consequences of that can be very distressing because people who are out of work for a long time, their skills tend to atrophy," Bernanke said.

But he added: "It's not clear that we can get substantial improvements in payrolls without some additional inflation risks, and in my view we can't achieve a sustainable recovery without keeping inflation under control."

In first press conference, Fed chief Bernanke delivers upbeat news like a star 04/27/11 [Last modified: Wednesday, April 27, 2011 9:43pm]
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