Bernanke Jackson Hole Absence Contrasts With Greenspan Adulation

When former Federal Reserve Chairman Alan Greenspan was set to retire, his final appearance in 2005 at the Fed’s annual symposium in Jackson Hole, Wyoming, became a celebration of his legacy.

By contrast, his successor, Ben S. Bernanke, will be skipping the final Jackson Hole conference of his second term as chairman because of a personal scheduling conflict, a Fed spokeswoman who asked not to be identified said yesterday. Bernanke, 59, has been the keynote speaker every year since he took over from Greenspan in 2006.

Greenspan’s final conference featured glowing reviews of his 18-year tenure, including a debate on whether he was the greatest central banker of all time. Bernanke, a former Princeton University professor who has tried to make the Fed more collegial, may wish to avoid such accolades, as well as speculation about whether he will stay for a third term, according to Vincent Reinhart, a former director of monetary affairs at the central bank.

“Greenspan’s last appearance at Jackson Hole was a series of love letters,” said Reinhart, now chief U.S. economist for Morgan Stanley in New York. “It could be that Ben Bernanke just didn’t want to do that.”

Bernanke has repeatedly declined to comment on his plans after the end of his term in January. At his March 20 press conference, he said that he’s “spoken to the president a bit” about his future and that he feels no personal responsibility to stay at the helm until the Fed winds down its unprecedented policies to stimulate the economy.

Managing Exit

“I don’t think that I’m the only person in the world who can manage the exit,” Bernanke said when asked at a news conference in Washington if he’s discussed his plans with President Barack Obama.

The economics symposium in Jackson Hole, sponsored by the Kansas City Fed, is closely watched by investors for signs of changes in central bank policy. The last time a Fed chairman didn’t address the conference was in 1988, when Greenspan didn’t speak.

This year’s conference has been tentatively set for the second half of August. The Fed spokeswoman didn’t say whether Bernanke would make an appearance via video. She also didn’t say whether Fed Vice Chairman Janet Yellen would attend.

“To be around the pool of potential succession candidates in August would be awkward,” Reinhart said in a phone interview. Reinhart also said it’s possible that Bernanke “puts his family first and has a conflict.”

Obama Advisers

Bernanke’s comments in March meshed with the views of some of Obama’s economic and political advisers who have said Bernanke, after spending most of his seven years on the job battling a financial crisis and its aftermath, is exhausted and wants to return to private life. The current and former administration officials asked to not be identified to describe the private conversations, Bloomberg News reported last month.

“He is not the sort who would be comfortable with some sort of celebration of his accomplishments, which would be the natural topic at his last Jackson Hole,” said Julia Coronado, chief economist for North America at BNP Paribas in New York, and a former Fed economist who attended last year’s event. “Rather, he wants to sail quietly into the sunset and let those who remain debate and discuss current policy issues.”

The possibility of Bernanke’s departure has left investors hunting for clues about his successor.

‘Very Fitting’

“Having Janet Yellen speak would be very fitting to set the tone for her nomination to succeed Bernanke as Fed chair,” Axel Merk, president and chief investment officer of Merk Investments LLC in Palo Alto, California, said in an e-mail.

High-profile speeches at the Wyoming gathering have made the event among the most-watched in central banking. In 2010, Bernanke’s remarks were seen as a signal that the Fed would start a second round of large-scale asset purchases, or quantitative easing. The purchases began in November of that year.

In 2011, the central bank embarked on a program to extend the maturities of assets on its balance sheet, known as Operation Twist, a month after Jackson Hole. Last year, Bernanke told the conference that “the costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant.”

The Fed began its third round of asset purchases the month after Bernanke spoke. It December, it more than doubled the size of the program to $85 billion a month from $40 billion.

Shifts Signaled

“Many a policy shift has been signaled by the chairman’s speech at Jackson Hole, dating back to the Greenspan era,” said Diane Swonk, chief economist for Mesirow Financial Inc. who has attended conferences featuring both Bernanke and Greenspan. “This has made the conference the media and market mover it has become.”

The event has attracted central bankers and policy makers from around the world. Last year, Andrew Haldane, executive director for financial stability at the Bank of England, and Stanley Fischer, governor of the Bank of Israel, spoke. In 2011, speakers included Christine Lagarde, managing director of the International Monetary Fund, and then-European Central Bank President Jean-Claude Trichet.

Even without Bernanke, “the content of the conference is always critical given the mix of attendees and speakers, especially internationally,” Swonk said.

Last year’s event also attracted 10 of the 12 regional Federal Reserve Bank presidents and Yellen. A paper by Columbia University’s Michael Woodford foreshadowed the Fed’s decision to make its interest-rate policy contingent on economic conditions.

Recovery Speed

At the time, the Fed pledged to keep its main interest rate near zero until a certain date. Woodford said that approach could inadvertently “reflect pessimism about the speed of the economy’s recovery.”

“A more useful form of forward guidance, I believe, would be one that emphasizes the target criterion that will be used to determine when it is appropriate to raise the federal funds rate target above its current level, rather than estimates of the ‘lift-off’ date.”

In December, the Fed followed Woodford’s advice, and announced it would hold the rate near zero until unemployment fell to 6.5 percent so long as the outlook for inflation did not climb above 2.5 percent.

The Kansas City Fed’s annual economics symposium was first moved to Wyoming in 1982 to lure then-Fed Chairman Paul Volcker, an avid fly fisherman, according to “In Late August,” a history of the event published by the Kansas City Fed.

That may not hold the same appeal for Bernanke, according to Reinhart, because “He doesn’t go fly fishing.”

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