Ben S Bernanke tightens hold on Federal Reserve communication

ATLANTA: Ben S Bernanke is tightening his control of Federal Reserve communications to ensure investors hear his pro-stimulus message over the cacophony of more hawkish views from regional bank presidents. The Fed chairman, starting Tuesday, will cut the time between the release of post-meeting statements by the Federal Open Market Committee and his news briefings, giving investors less opportunity to misperceive the Fed’s intent.

In recent presentations, he has pledged to sustain easing, defending $85 billion in monthly bond purchases in Congress last month and warning that “premature removal of accommodation” may weaken the expansion".

“Bernanke rightly views it as imperative to get out in front of any movement to quickly pull away from stimulus, and to signal that to markets,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore who worked at the Fed’s division of monetary affairs from 2004 until 2008.

Bernanke “felt he needed to take the wheel” of communications to dispel any misperception that the Fed will end bond purchases too soon. Bernanke’s push to continue stimulus faltered with the January 3 release of minutes from the FOMC’s December meeting, which said several officials favoured slowing or stopping bond buying well before the end of 2013.

The yield on the 10-year Treasury note rose that day about 0.07 per cent to 1.91 per cent, the highest since May.