Ben Bernanke gave the graduating class of Princeton University one of the more unusual speeches for a Federal Reserve chairman: He quoted a wide range of celebrities and scarcely mentioned economics.
Bernanke’s words are normally scrutinized by global investors for hints about the Fed’s possible next move. But in his address Sunday on Princeton’s campus in New Jersey, he specifically cautioned that his comments “have nothing whatsoever to do with interest rates.” Instead, he took a poke at his profession.
“Economics,” Bernanke told the graduates, “is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong.
“About the future, not so much.”
Bernanke also offered nothing that could be taken as a signal of when the Fed might begin to taper its $85 billion-a-month in bond purchases. Those purchases have been intended to keep loan costs at record lows to encourage borrowing and spending.
The stock and bond markets have been rattled by speculation that the Fed will start to scale back its bond purchases later this year. Once the Fed does so, interest rates will likely creep up.
Bernanke, wearing a black robe, delivered the baccalaureate address to about 1,300 graduates. He was introduced by Princeton University President Shirley M. Tilghman, who said that Bernanke’s academic research into the Great Depression while he was teaching at Princeton had prepared him to guide the U.S. economy as Fed chairman during the 2007-2009 Great Recession.
Bernanke said it’s his impression that most Washington politicians and policymakers try to do the right thing most of the time.
“Public service isn’t easy,” he said. “But in the end, if you are inclined in that direction, it is a worthy and challenging pursuit.”
The chairman delivered his remarks in a speech titled “The Ten Suggestions.”
Bernanke kidded the graduates’ parents about the financial strains of sending children to Princeton. He said someone who had sent three children to the Ivy League school once told him that financially, it was like “buying a new Cadillac every year and then driving it off a cliff.”
The Fed chairman has given no indication as to what he plans to do when his current term ends in January. If Bernanke chooses not to remain at the Fed for another term, there has been speculation that he might return to Princeton, where he spent 17 years as a professor. But he might have sent a hint in one of his jests Sunday.
“I wrote recently to inquire about the status of my leave from the university,” Bernanke said. “The letter I got back began, ‘Regrettably, Princeton receives many more qualified applicants for faculty positions than we can accommodate.’ ”
Bernanke felt the need to add in a footnote to the printed copy of his speech that this remark was a joke, since his leave from Princeton expired in 2005.