Ben Bernanke
Ben Bernanke
Ben Shalom Bernankeis an American economist at the Brookings Institution who served two terms as chairman of the Federal Reserve, the central bank of the United States, from 2006 to 2014. During his tenure as chairman, Bernanke oversaw the Federal Reserve's response to the late-2000s financial crisis. Before becoming Federal Reserve chairman, Bernanke was a tenured professor at Princeton University and chaired the department of economics there from 1996 to September 2002, when he went on public service leave...
NationalityAmerican
ProfessionPolitician
Date of Birth13 December 1953
CityAugusta, GA
CountryUnited States of America
These inflation effects should fade even if energy prices remain elevated, so long as monetary policy keeps inflation expectations well-anchored.
As long as we find that the energy impact is only temporary ... my guess is that the effects on the overall economy will be fairly modest.
Monetary policy is most effective when it is coherent, consistent and predictable as possible, while at all times leaving full scope for flexibility and the use of judgment as conditions may require.
Clear communication is always important in central banking, but it can be especially important when economic conditions call for further policy stimulus but the policy rate is already at its effective lower bound.
In the shorter term, the devastation wrought by Hurricane Katrina will have a palpable effect on the national economy.
In the absence of a shift in market perceptions of the relative attractiveness of U.S. and foreign assets, government policies would likely have only limited effects on the trade balance.
Monetary policy is a blunt tool which certainly affects the distribution of income and wealth, although whether the net effect is to increase or reduce inequality is not clear.
So far, the effects appear to be relatively modest on growth.
As long as there's not permanent damage to our energy infrastructure, the effects on the overall economy should be fairly modest.
Certainly there is no way to direct the effects of monetary policy at a single class of assets while leaving other financial markets and the broader economy untouched. One might as well try to perform brain surgery with a sledgehammer.
The Federal Reserve has always recognized the importance of allowing markets to work, and government oversight of financial firms will never be fully effective without the aid of strong market discipline.
Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates.
There's no magical relationship between inverted yield curves and recession. There's a debate why long-term rates are so low. It's partly a low term premium and a lot of saving looking for a relatively limited number of investments.
It's been a resilient economy, it's responded well and job creation has proceeded apace.