Federal Reserve Board Chairman Ben Bernanke made history by facing nearly five dozen reporters in an hour-long press conference, the first ever for the U.S. central bank.
With his usual unruffled delivery, Bernanke answered a dozen and a half questions ranging from the effects of long-term unemployment, the value of the dollar and gas prices to his personal feelings about staring down the media corps.
Bernanke reassured the press, and the public watching via Web cast, that the Fed is closely monitoring all indicators to balance economic growth against the threat of inflation.
"It's very hard to blame the American public for being impatient," he said. "The combination of high unemployment, high gas prices and high foreclosure rates is a terrible combination. ... I am very confident that in the long run, the U.S. will return to being the most productive, fastest-growing and most dynamic economy in the world."
The Fed is watching carefully to see the current "moderate recovery" continue and strengthen, with particular hope that the labor market will improve further. For now, the major concern is to establish a sustained recovery, with inflation being of little immediate threat, he said. The central bank has a dual mission to support employment and keep inflation under control.
The Fed expects a smooth end on June 30 to its program to purchase $600 billion in Treasury securities, with no impact to the economy or markets. In the long term, the biggest danger to the U.S. economy is the federal deficit, he said.
The press conference took place on the top floor of the Fed's Martin Building in Washington, D.C., in a dining room that often serves as a meeting or conference room -- the same room that held former Chairman Alan Greenspan's farewell dinner with the FOMC. It was a dark wood paneled room, with either side of the panels opening up to form a bigger space. Under a gaudy 1970s-era light fixture, 54 reporters sat in five rows of assigned seating, surrounded by a dozen still photographers and half-dozen video cameras. Fed spokeswoman Michelle Smith called on journalists as they raised their hands.
The first row of reporters, from major print and television media, received the first questions.
Unlike the rowdy White House press corps, which shouts questions at the president, reporters quietly raised their hands while waiting to be called upon. The only excitement occurred earlier in the day, when a GPS device in Bloomberg Television's van caught on fire, but was quickly put out.
"The Federal Reserve has been looking for ways to increase its transparency for many years," Bernanke said, in explaining the Fed's desire to dispel the mystique of central banking by answering questions immediately following the Federal Open Market Committee meeting. "As recently as 1994, the Federal Reserve didn't even tell the public when it changed the target for the federal funds rate."
Fed Vice-Chair Janet Yellin headed a subcommittee looking at ways to better communicate its thinking, and the press conference quickly rose to the top of her list, he explained. Other countries' central banks hold such conferences regularly.
"It does provide a chance for the chairman, in this case, to provide some additional color and context for both the meeting and the projections that are being made. We thought it was a natural next step," Bernanke said.