Former Federal Reserve chiefs Ben Bernanke and Janet Yellen both complained that a cacophony of the 19 top central bank officials often muddled the central bank’s message. Jerome Powell is going to do something about it.
By holding eight press conference a year and trying to boil down central bank policy into simple language, Powell is “crowding out the over [Fed] governors and bank presidents,” said Vincent Reinhart, a former top central bank staffer.
Powell also said he wanted to “stay in his lane” and won’t comment on policy issues that touch on other branches of government.
“He’s driving the bus in that lane,” Reinhart said.
And Powell will keep his message close to the rational that the Fed sets for policy.
“He’s not going to spend a lot of time worrying about alternative scenarios,” he said. “At the end of the day, there will be a clearer message.”
The new Fed chairman seems much more comfortable explaining Fed policy and doesn’t mind meeting the press eight times a year, Reinhart said.
Neither Bernanke ror Yellen seemed to enjoy the press conferences as much, he noted.
At their meeting Wednesday, the Fed raised their benchmark interest rate and signaled they intend to hike a total of four times this year, up from three in March.
Reinhart said he thought that Powell was the mystery swing vote that moved the Fed’s expectations of future rate hikes to four from three.
Powell likely kept his dot at three moves in March in order to keep the median down so as not to rush the process of market adjustment, Reinhart, now chief economist at Standish, said in an interview.
“A reasonable attribution is he was at three in March, and the others were not as likely to change,” Reinhart said.