As President Obama prepares to name a new Fed Chairman, he may be well advised to look closely at the communications skills of the candidates. Ben Bernanke dragged the Fed into the modern age of communications and institutionalized commonplace PR strategies to the Fed’s tool kit.
A comparison of the two leading candidates, Larry Summers and Janet Yellen, suggests that both have communications know-how. No doubt Summers is a more practiced communicator, but Yellen has fully embraced today’s communications/transparency paradigm. Under Bernanke, she led a subcommittee on communications and presumably developed the playbook for publicly releasing FOMC minutes, issuing monetary policy “guidance,” as well as establishing a schedule of post-FOMC-meeting press conferences.
But despite Yellen’s studious approach to communications, Bernanke has had trouble staying on message. Bernanke suggested accelerating QE “tapering.” Markets reacted badly, and at his next press conference, Bernanke pushed back. The Fed would “continue to support the recovery,” but his message was lost in the media glare. One live blogger wrote: “Bernanke seems frustrated that markets and pundits don’t understand the point of policy guidance.”
THE PR VERDICT: “B” (Good Show) to Janet Yellen’s methodical approach and realistic expectations.
THE PR TAKEAWAY: The best communicators focus on long-term objectives. While she has had some bad breaks managing her Chairman’s PR with the financial markets, Yellen believes good communications can support monetary policy and reinforce the Fed’s leadership. As she told journalists in April, “I believe further improvements in the FOMC’s communication are possible, and I expect they will continue.” No PR plan can work flawlessly. The institution you speak for is the message, not how aggressively you handle the media or how articulately a spokesperson expresses a viewpoint.