Various things happen at the White House Correspondents' Association dinner. Stephen Colbert demonstrates that true satire is forbidden inside the Beltway. Famous and semi-famous people run into the media elite and semi-elite, and hilarity ensues. And bearded Federal Reserve chairmen offer their first annual monetary policy gossip fests to TV financial channel starlets (WSJ, subs. req'd):
Indications that Federal Reserve Chairman Ben Bernanke is potentially more hawkish toward inflation than previously thought triggered a sudden selloff of stocks and bonds in the final hour of trading Monday.
The downturn came after Maria Bartiromo, a commentator on financial news network CNBC, said Federal Reserve Chairman Ben Bernanke told her over the weekend at a White House correspondents' dinner that the media misinterpreted his comments in congressional testimony last week as too lenient toward inflation.
Last week, stocks rallied after Mr. Bernanke said, while addressing a congressional committee, the Fed may pause in its two-year interest-rate-raising campaign, even if inflation still remains a concern.
Traders said Mr. Bernanke's reported remarks today raised questions about where he plans to take monetary policy in the next few months. "The uncertainty is what's hitting" stocks, said Brian Williamson, an equity trader at Boston Company Asset Management ...
Some market watchers were perplexed about the turn of events Monday. "The 'hey I didn't mean that' bit is usually finessed a bit more neatly," said David Wyss, chief economist at Standard & Poor's, who said former Fed Chairman Alan Greenspan would usually deliver a follow-up speech if he thought the market has misinterpreted his views on monetary policy.
Can Wyss possibly mean that a little dinner party chatter to the "money honey" between courses is not "finesse"?
UPDATE: The adverse reaction continues (WSJ, subs. req'd):
While CNBC continues to trumpet this morning the fact that Federal Reserve Chairman Ben Bernanke dished to Maria Bartiromo his personal thoughts on the market's reaction to his testimony last week, some analysts are questioning the Fed chairman's communications skills. Ms. Bartiromo reported yesterday -- late in the trading session -- that Mr. Bernanke had been dismayed to see the market's reaction to what they thought was a dovish speech by the Fed chairman. Today, analysts continue to question the Fed's muddled message and the somewhat artless manner in which the Fed chairman chose to reveal his concern about its interpretation.
Ward McCarthy, analyst at Stone & McCarthy Research Assoc. in Princeton, questions the venue of choice. "She did not quote Bernanke, so we do not know what exactly he is supposed to have said to her, nor do not know if he simply was making an off-handed remark that she may have misinterpreted," he wrote in morning commentary. "We also think that it is odd that she would delay revealing this potentially critical comment about policy until after the weekend, and late in the day at that. We cannot dismiss her comments, but we also find both the nature of the comments and the way that they were revealed to have been rather peculiar."