Benjamin S. Bernanke 2006–

Chairman Bernanke’s background differs from those of his two immediate predecessors. He had been a professor of economics at Princeton University for many years. He and Arthur F. Burns are the only two chairmen with such an academic history. He was on leave from Princeton and a member of the Federal Reserve Board from August 5, 2002 through June 21, 2005, when he resigned from both positions to become Chairman of the Council of Economic Advisors. He had many publications and public statements while holding these positions, which among other things suggest that he would like to have the FOMC set specific inflation targets.

A subcommittee on communications chaired by Board Vice Chairman Donald L. Kohn, with two Federal Reserve Bank Presidents as members, was established early in Bernanke’s term to examine how the actions and intentions of the FOMC could be more clearly transmitted to the public. While specific inflation targets have not been formalized, on November 14, 2007 the FOMC announced that it would revise and increase the frequency of its Monetary Reports to the Congress from two to four per year. The revised reports will include information about FOMC members’ average predictions of the personal consumption expenditure inflation rate and real GDP and distributions of the predictions over a horizon of three years. Because forecasts of the inflation rate over three years must reflect the consequences of FOMC policy decisions, this new communications policy has been interpreted in the press as being inflation targeting “lite.”