Wearing a grey suit and sitting at a podium in a conference room at the Fed's C Street Annex Building, Fed Chairman Ben Bernanke made history this afternoon, talking to the media for the first time in a post-FOMC meeting briefing. No other Fed chairman in the 98-year history of the nation's central bank has done this.
Bernanke offered a stoic presence in a room filled with more than 50 reporters and dozens of cameras, confidently fielding more than 18 questions during the hour-long news conference.
"Basically, Mr. Bernanke made no mistakes, added little to what we know but did show, at least to the public, that he understands their concerns and would do the best he could to get the economy and payrolls growing faster," wrote Joel Naroff, president of Naroff Economic Advisors.
Bernanke's opening remarks focused on underlining the Fed's post-meeting statement, which predicted a continued moderate improvement in the economy with slow jobs growth despite rising oil prices and continued challenges in the housing market.
He then took questions from reporters, pushing through the anticipated end time of 3 p.m.
Bernanke told reporters the Federal Reserve is not, at this point, concerned that rising commodity prices are a long-term threat to the economy.
"Our view is gas prices will not continue to rise at the recent pace," he said.
He noted that in the medium term, futures markets have not yet shown hints that inflation will be a concern and that the recent run-up in prices are likely the result of increasing demand for oil from the developing world and concerns about supply because of the recent events unfolding in the Middle East and North Africa.
Bernanke also fielded a question about the recent S&P notice that the U.S. could face a ratings downgrade for government-issued securities if the nation's budget problems are not addressed. Bernanke said that the credit rating agency's actions might be a good thing in that it could prompt the Obama administration and Congress to deal with the long-term fiscal problems the government faces.
"It's the most important economic problem, at least in the longer term, that the U.S. faces," Bernanke said, adding that recent spending cuts pushed by lawmakers have not had a negative effect on the economy.
When asked about the seemingly slow national economic recovery and the Fed's downgrade of its expectations for economic growth in 2011, Bernanke said that many factors are at play.
In the first three months of the year, Bernanke said, gross domestic product will be lower because of slower defense spending, weather effects and weaker exports. But those factors will be gone in the later part of the year.
"Now, there are some factors there that may have a longer-term implication," he said. "For example, construction, both residential and non-residential, was very weak in the first quarter. That may have some implications going forward."