Federal Reserve Chairman Ben Bernanke's taped interview with CBS' "60 Minutes," scheduled to air this Sunday, is unusual not only because it's the first television interview with a Fed chairman in 20 years. It also appears to violate the Fed's blackout practice, in which members of the Federal Open Market Committee are usually silent most of the week before and after an FOMC meeting.
The Fed is scheduled to meet March 17 and 18. Asked about why the Chairman violated the practice, Fed spokeswoman Michelle Smith said, "The Chairman thought this was a useful opportunity to communicate with a broad audience during an extremely stressful time."
FOMC members have, on occasion spoken during blackout periods and many interpret the practice differently. Some won't appear in public a full week before and after, others just three or four days. It's a practice, not a Fed regulation, but has been fairly uniformly followed over the years.
The practice is intended to keep the words of FOMC members from influencing the markets and thereby the decision at the upcoming meeting. As a result, depending on what is said in the "60 Minutes" interview, it is entirely possible that Bernanke's comments will influence the market and the FOMC meeting that week.
Some observers believe the blackout period should especially apply to the Fed chairman, because he does not want to be seen influencing at least publicly a meeting's outcome. That issue could be less sensitive right now with the Fed funds rate pegged in a range from zero to 25 basis points and expected to stay there for an extended period.
No transcript or quotes from the Fed chairman are expected until Sunday.