Tornado Alley (PROG)

[StephanieVanbryce]

Bernanke Plays Offense

November 19, 2010, 10:18 am

In a speech today in Frankfurt, the Federal Reserve chairman, Ben S. Bernanke, brought out the big (rhetorical) guns. He:

In a speech today in Frankfurt, the Federal Reserve chairman, Ben S. Bernanke, brought out the big (rhetorical) guns. He:

1. chastised China’s currency policy (“The exchange rate adjustment is incomplete, in part, because the authorities in some emerging market economies have intervened in foreign exchange markets to prevent or slow the appreciation of their currencies.”)

2. said, in no uncertain terms, that Congress should step up to the plate and start doing its part to boost growth (“a fiscal program that combines near-term measures to enhance growth with strong, confidence-inducing steps to reduce longer-term structural deficits would be an important complement to the policies of the Federal Reserve”)

3. called for a “rebalancing” of growth rates around the global economy

4. said the potential outlook for America’s job market should be considered “unacceptable” (“on its current economic trajectory the United States runs the risk of seeing millions of workers unemployed or underemployed for many years. As a society, we should find that outcome unacceptable”)

At least in tone, if not necessarily entirely in substance, this seemed to be a departure from what we’ve historically heard from Fed chairmen, usually at pains to avoid the political fray.

“Today’s speech by Bernanke was far removed from the subtle, circumspect language traditionally employed by monetary policy makers in discussing the choices of foreign officials,” wrote Dana Saporta, an economics director at Credit Suisse, in a note to clients. “It highlights the ‘unconventional’ nature of not just U.S. monetary policy operations, but of Federal Reserve rhetoric, as well.”

http://economix.blogs.nytimes.com/2010/11/19/bernanke-plays-offense/