From Binyamin Appelbaum. This is the “meat”:
Why did the Fed decide in December to stop predicting an end date for low interest rates, and instead to describe its economic objectives?
“We gave a date which was just our best guess, and then it changed a couple of times,” Mr. Bernanke said. “What we’ve tried to do in our more recent evolution is explain what we will be looking for.”
Hopefully that will be more clear, he said. And as he noted later, he really is trying to be more clear.
“There’s just been an enormous change and we are just much, much more transparent and easy to understand than would have been the case 15 or 20 years ago,” Mr. Bernanke said.
So what’s the deal with all these experimental strategies?
The problem with central bankers in the 1930s, Mr. Bernanke said, is that “they were afraid to do anything that was unorthodox.”
“Sometimes,” he went on, “you need to consider unorthodox approaches.”
Yes, he´s more “transparent” than his predecessor (who bragged about his ability to be incoherent in public). But “transparency” hasn´t scored him points. In fact it has increased confusion.
And how unorthodox is Bernanke´s Fed really being? Back in the 1960s they also ‘targeted’ unemployment. And in the 1930s FDR had to step in to loosen monetary policy.
The main problem, I think, is that Bernanke is ‘handcuffed’ to a primitive view of inflation targeting.