Federal Reserve Chairman Ben S. Bernanke said monetary policy transparency makes the Fed more effective and “democratically legitimate.”
“Increasing the Fed’s transparency, openness, and accountability has been one of my top priorities as chairman,” Bernanke said today at the central bank in Washington. He didn’t elaborate on the outlook for monetary policy.
“The complex challenges we face as a nation are best addressed in an environment of informed public discourse, which is only possible when policy decisions are made in as transparent a way as possible,” Bernanke said to teachers at a town-hall meeting. “A more open Fed, in my view, is both a more effective and more democratically legitimate institution.”
Bernanke said the Fed is falling short on its dual mandate to ensure price stability and full employment, with unemployment at 7.3 percent and inflation below its 2 percent target.
“We’re missing on both of them,” Bernanke said in response to a teacher’s question. “We need a stronger, more rapidly moving economy.”
Still, the Fed’s credibility on inflation is “very strong,” and the “labor market will get stronger,” he said.
Bernanke, 59, has sought to boost the transparency of the Fed since taking office in 2006 by explaining the central bank’s actions directly to the public, releasing more information on deliberations and giving regular press conferences after policy decisions. His last planned press conference as chairman is on Dec. 18 after a two-day meeting. His term expires Jan. 31.
Bernanke is a former Princeton University economics professor whose wife, Anna, is a teacher.