The most controversial Federal Reserve Chairman in the 100-year history of the Federal Reserve spent two days testifying before Congress last week. In all probability it was Ben Bernanke's best and final chance to sit directly in front of elected officials and define his vision and legacy.
What did we learn? Not much, actually. According to Lee Munson, founder and CIO at Portfolio LLC, there was little reason to expect to glean new information from a man who has spent six years being, if anything, too transparent. Bernanke hasn't changed his tune in at least two years. He's trying to create jobs and will keep his foot on the stimulus gas pedal as long as inflation remains subdued. The only thing that changes with each Bernanke appearance is the reaction of financial markets.
"The key thing I'm noticing is that professional speculators as well as Main Street investors are not yet used to this level of transparency and I think it's disruptive," Munson says in the attached video.
Not that Bernanke is entirely to blame. He's a central banker not a psychotherapist. Having rejected the cagey obfuscation of his predecessors, Bernanke has attempted to remain willfully consistent. It's the markets that are manic depressive, not him.
Munson is as perplexed at the notion of making huge portfolio changes based on Bernanke's latest utterance. "When you already know the game-plan I find it bizarre that people are reacting to every little thing he says when there's no new information."Read More »from Bernanke Is Too Transparent, Creating ‘Bizarre’ Market Volatility: Munson