Quick Note on the Bernanke Press Conference
The news channels are only getting part of the story right about Ben Bernanke's first press conference today.
This is not an attempt by the Fed to provide additional information to financial markets; the Fed already communicates with them on a regular basis. In fact, that's always been the Fed's primary target audience.
The press conference is the latest piece of a strategy the Fed has been using to broaden its audience by going beyond financial markets and over the head of members of Congress by speaking directly to voters. It's based on two perceived needs. First, Bernanke told his staff over a year ago that the Fed had no choice but to talk to Main Street on a regular basis because, if it didn't, it was going to have to explain it's actions at the worst possible time -- after a crisis occurred. Second, as I've written about on CG&G over the past year, the Fed has a political bullseye on its chest and has no choice but to build public support for what it does and how it does it.
As a result, I'm not expecting much news to come from the press conference. I also expect that Bernanke will talk in less technical language than he has in the past because the audience will be different.