Fed Press Conferences: Good or Bad Idea?
by Tim Manni
The Federal Reserve said this week that the central bank may consider holding regular press conferences to inform the American people of their latest discussions and possible strategies to combat the ongoing crisis:
“I think it is important for the public to understand what is going on and to know that the government is trying to solve the problem,” Mr. Bernanke said in an interview. “They should know we have a plan and a strategy.”
“The American public is seeing things happening that it doesn’t like and doesn’t understand and nobody is really explaining it to them,” says Alan Blinder, a Princeton professor and former Fed vice chairman. “That was true in the Bush administration and it remains largely true in the Obama administration. The Fed is filling the void.”
The recession has spurred confusion and created the need for officials to explain the financial and economic process as well as its accompanying solutions to those outside political and economic circles — the Americans on Main Street.
The extraordinary number of taxpayer-supported bailouts has generated an obligation amongst Federal officials to detail where the taxpayers’ money went and how it has been spent.
While the disclosure and apparent honesty should be appreciated by consumers, there are some concerns that the press conferences could create more confusion than clarity in the markets and the public. Much as the overly-general and non-specific addresses in the early weeks of the Obama Administration sent markets tumbling, ambiguous or in-concise explanations of upcoming Federal policies or strategies could spread more harm than good.
Do you think it’s a good idea for Fed to regularly address the public in order to disclose their latest strategies and/or policies (in an easier-to-understand language)?
