Feb. 15 (Bloomberg) -- He sat stoically in his dark suit and white shirt, hands folded, directing his gaze at the particular speaker, picking up a pen now and then to jot some notes.

What could Ben Bernanke, chairman of the Federal Reserve, be thinking as he listened to members of the Senate Banking Committee present their views on the U.S. economy and rate his performance on monetary policy at a hearing designed to be a platform for the Fed?

Our elected representatives, who are good listeners when they are doing the talking, expressed concerns about income inequality, the trade deficit, the budget deficit, the rising cost of tuition, access to health care, Social Security, falling home prices, stagnant wages, the hurricane effect on the Gulf States, China's currency, North Korea's nukes and Iran's nuts.

Stock and bond investors, who listen intently when the Fed chairman talks, liked what they heard. Growth has slowed to a ``sustainable'' pace that should ensure ``a gradual ebbing of core inflation,'' Bernanke said. Still, the Fed's predominant concern remains the risk that inflation, currently running at about 2.4 percent (an average of the major headline and core measures), ``will not moderate as expected.''

While Bernanke gave no indication the Fed was considering any reduction in the overnight lending rate, he outlined possible risks to the expansion (one word, Ben: housing) in his prepared testimony.

The semi-annual monetary policy report to Congress offered no surprises, no fireworks and no new-fangled indicators, such as the ones Bernanke's predecessor, Alan Greenspan, invented as the economic environment dictated. It was straightforward testimony elaborating on the Fed's recent statements.

Inconsistencies

Bernanke, an advocate of ``good communication'' and a ``transparent policy process,'' doesn't say one thing and mean another. That said, one can only imagine what this serious, academic economist was thinking as he submitted to politicians' plumping their feathers for the voters.

Senate Banking Committee Chairman Chris Dodd, Democrat from Connecticut, who has added ``presidential hopeful'' to his resume, delivered a ``brief'' (OK, he lied) opening statement covering a laundry list of issues. Among them was the potential for increased default and foreclosure rates on exotic subprime mortgages.

Without missing a beat, Dodd bemoaned the fact that millions of Americans ``do not have access to mainstream financial institutions.''

I could practically hear Bernanke's inner voice:

(``That sounds a lot like Woody Allen's joke about the Catskill Mountain resort where the food is terrible and the portions small. Even seasonally adjusted for the source -- a politician -- Dodd's comments are goofy.'')

Pitching Stats

Senator Richard Shelby, the ranking Republican from Alabama, regaled Bernanke with stats on jobs and economic growth.

(``I could be shooting hoops while he plays to the camera. This is as silly as ``Washington Week,'' where Beltway journalists ask one another questions to which they all know the answer.'')

Senator Jim Bunning, Republican of Kentucky, displayed his financial acumen when he asked Bernanke about the ``inverted inversion of the yield curve.''

(``Does a double negative mean a positive yield curve? It's not obvious that his sweeping sidearm delivery gives him a comparative advantage in oversight of the Fed.'')

Evan Bayh, Democrat of Indiana, showed some humility when he passed on an opening statement, saying the senators were here to listen to Bernanke, not him.

Geopolitical Risks

He more than made up for it in the Q&A with a lengthy statement (his question was short), pointing out problems -- the threat of nukes in Iran, the implications of closing the Straits of Hormuz to Persian Gulf oil shipments -- to which the Fed chief couldn't possibly have answers.

(``Would the Libby defense work?'' Bernanke must have wondered. ``Bayh did give me an out, saying he realized I was busy with other things. Greenspan always seemed to have facts and figures on oil exploration at his fingertips, but I'd rather punt on national security.'')

The Senate questioners are generally a cut above their counterparts on the House Financial Services Committee, who get a crack at Bernanke today. Based on the quality of yesterday's questions and relevance to things the Fed can control, my advice would be: Lower your expectations.

(Caroline Baum, author of ``Just What I Said,'' is a columnist for Bloomberg News. The opinions expressed are her own.)

To contact the writer of this column: Caroline Baum in New York at cabaum@bloomberg.net.

Last Updated: February 15, 2007 00:11 EST