For the very first time in its 97-year history, the Federal Reserve Bank held a press conference following its FOMC meeting. Chairman Ben Bernanke spoke for about 15 minutes, then took about 16 questions for another 45 minutes. The very last question concerned the press conference itself, which Bernanke answered as part of an ongoing effort by the Fed to be more transparent. Most of the questions revolved around the key issues of the day, the rising costs of gasoline and food, lingering high unemployment, lower than expected economic growth and when the Fed will end its policy of buying U.S. Treasuries, a.k.a., quantitative easing.

ben bernanke first press conference

Needless to say, Bernanke denies that Fed monetary policy is having any impact on the higher costs for gasoline, food and other commodities. In regards to the ever-weakening U.S. Dollar, Ben punted the subject to Treasury Secretary, Tim, ‘Turbo-Tax’ Geithner, who stated earlier today that the dollar was being devalued. Oh really? I suppose it is at a historic low due to the super-moon?

The Federal Open Market Committee meeting which began yesterday has determined that they will continue to keep interest rates at current levels, between 0 to 0.25%. As for QE2, the latest quantitative easing program of spending $600 Billion freshly printed, or digitized, dollars to buy U.S. Treasuries, Bernanke stated that the FOMC will continue forward as planned until the end of the Second Quarter, June 30. While he did not rule out a QE3, he did say that for the time being, money from maturing Treasury bonds would be reinvested and not taken out of circulation.

As far as high oil, gasoline, food and commodity prices, Bernanke says that the current trends in inflation are only “near-term” and expects prices to fall and stabilize in the ″medium-term″. When asked specifically what he means by “medium-term”, Bernanke punted with double-talk. He denies that the Fed′s monetary policy is the culprit, even though most of these commodities, such as oil, are pegged to the Dollar. Instead, he blames uncertainty in the world as well as increased emerging nation demands.

The Federal Reserve press conference following the FOMC meeting gave little good news. Unemployment is expected to remain well above 8% for the rest of the year and GDP growth expectations have been lowered to less than 2% in 2011. Ben Bernanke believes the Core Inflation Rate will also be about 2%, even though the Headline Inflation Rate (gasoline, food, etc.) is nearing 9+% this year! When asked about the recent Standard and Poor’s warning about Federal budget deficits and U.S. bonds losing their Triple-A status, Bernanke said the S&P report was nothing new and added that work on reducing the budget deficit should have top priority in Washington.

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