Abbott and Costello. Laurel and Hardy. Jerome Powell and Ben Bernanke. Two Federal Reserve Chairs walk into a Perspectives on Monetary Policy panel discussion at the Thomas Laubach Research Conference, and one of them says, “Boy, the food here is too expensive.” And the other one says, “I know, and such small portions for more dollars.” Bernanke and Powell participated in a good old-fashioned and cozy tête-à-tête to discuss current events, mainly inflation and the banking turmoil. But while the two monetary policy legends blamed external factors for all the damage since the COVID-19 public health crisis, neither man looked into the soul of the Eccles Building to ascribe a modicum of blame.
There were two main headlines emanating from the May 19 Powell-Bernanke event. The first was that the current Fed chair does not believe interest rates may need to rise further as the credit crunch from the banking crisis might be enough to maintain inflation’s downward trajectory and achieve the institution’s 2% target rate. The second was that Bernanke seemed far more confident speaking to the audience than his colleague on stage, as Powell read primarily from several pieces of paper.
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