No More Hints and Whispers

On June 5, Federal Reserve Chairman Ben Bernanke hit investors with a bolt from the blue when he worried publicly in a speech about the danger of rising inflation. His unexpected remarks -- which dashed hopes for a pause in rate hikes -- sent the Dow plummeting almost 250 points in two days.

But how could the market be so surprised by a Fed chairman whose mantra is communication? Bernanke seems to have adopted the central banker's version of Regulation FD, for "fair disclosure," the securities rule requiring public companies to reveal material information to all investors simultaneously. While his predecessor, Alan Greenspan, often signaled his intended message through winks and nods in off-the-record interviews with the press, the new Fed chief is offering little whispered guidance. Such a shift to public discussion, rather than private hints, is consistent with Bernanke's emphasis on transparency.