LINDA WERTHEIMER, HOST:
It's MORNING EDITION from NPR News. I'm Linda Wertheimer.
DAVID GREENE, HOST:
And I'm David Greene, good morning.
Whenever officials gather at the Federal Reserve, everyone is looking for signals about whether the economy is improving, getting worse or staying the course. That's certainly true as the Fed wraps up two days of meetings today. And the person delivering many of the signals, Chairman Ben Bernanke, will be holding what's likely his last press conference as his term wraps up.
Let's turn to our Fed watcher and a familiar voice on the program, David Wessel. He's economics editor of The Wall Street Journal. David, good morning.
DAVID WESSEL: Good morning.
GREENE: So what signals from the Fed are you looking for today?
WESSEL: Well, the Fed has been printing $85 billion a month since September 2012 and using that to buy long-term Treasury bonds and mortgages as part of its effort to keep the economy going. The big item on the agenda today is whether to scale back those purchases - and if so, when and how rapidly. Now, markets expected them to do this in September and were shocked when the Fed put it off. This time they're split so no one's quite sure - are they going to do it now or are they going to do it later.
GREENE: And David, we should remind people that if and when, you know, the Fed begins to taper and roll back these bond purchases, it's seen by many as a sign that the Fed is getting confident that the economy is doing better, which can set up a whole reaction that affects consumers and investors. I mean it's a big deal.
WESSEL: That's right. When the Fed first started talking about reducing its bond buying - they call it tapering in the markets - interest rates on mortgages and corporate borrowing went up, the stock market went down. Then in September, when it surprised everybody and didn't do it, interest rates fell and stock prices went up.
This time the Fed's been trying to explain to everyone who will listen that even if it does begin to reduce the size of bond purchases, it's not trying to put the brakes on the economy or sending some kind of all clear. It still thinks the economy, although it's improving, needs a lot of help from the Fed.
GREENE: Well, if that's the case, I mean if they believe that the economy still needs help, why is the Fed even considering cutting back on this bond buying?
WESSEL: Well, that's a good question and even inside the Fed there are some people who are asking it. I think what's going on is that some people aren't sure that buying all these bonds is doing much good for the economy. Others are worried about just how much of a portfolio of bonds the Fed's accumulated. Four trillion dollars worth - how are they ever going to get out of this?
And others are concerned that this beginning to create the early stages of a financial bubble and no one wants to do that again. One thing that's really clear though is the Fed does not want anybody to think that it's about to raise the short-term interest rate, which has been holding near zero since 2008. And I expect Mr. Bernanke to really emphasize that today at his press conference.
GREENE: You mention press conferences. I mean Bernanke is the one who really brought press conferences to a place, the Fed, that's always been known for mysterious and opaque. I mean I'm curious about your impressions. I mean how has he handled them?
WESSEL: Well, you're right. He didn't expect to have to fight the risk of another Great Depression. But he came to office determined to make the Fed more open, more transparent, he says. And the press conferences that he began back in April 2011 are the most visible sign of this. He's done a pretty good job, I think. He has tried to bolster public confidence in the Fed, explain what they're doing. He's created a bit of confusion form time but he hasn't made any really big mistakes.
He was very tentative and nervous at the beginning. Now he seems somewhat confident. And the polls show the Fed has little bit more public support than it did three or four years ago.
GREENE: A time when a lot of places in Washington are struggling with public support when you look at polls.
GREENE: So Ben Bernanke's term is up in January. His likely successor is Janet Yellen. You think we'll see a different approach from her - either policy or in press conferences and the approach to the public?
WESSEL: I don't really think so. Janet Yellen, who's been the vice chair of the Fed for the past several years, has been at Mr. Bernanke's side helping him shape policy and his approach to the public, including these press conferences. I think by appointing who's inside the Fed, the president has opted for continuity. It wasn't his first idea - he wanted to have Larry Summers, we know.
She hasn't had quite so much practice at the press conference as he does, so she'll be doing a lot learning on the job. But a big change in Fed policy, I don't see one coming.
GREENE: Alright, David Wessel, it's always good to talk to you.
WESSEL: You're welcome.
GREENE: He's economics editor of The Wall Street Journal. Transcript provided by NPR, Copyright NPR.