LIKE NANCY REAGAN OR FANS of the Chicago Cubs, people who work on Wall Street are always on the watch for omens. So it's no wonder that so many hang on every sniffle, twitch and gulp from new Federal Reserve Chairman Ben S. Bernanke. Nor is it surprising that some blame him for the market's recent gyrations.
But it is silly. A Fed chief's currency is his credibility -- and the new chief and the markets have had some miscommunication. When Bernanke testified to Congress in April that the Fed might pause in its policy of raising interest rates, the market responded with a small rise. An offhand (and ill-advised) remark later that month to CNBC reporter Maria Bartiromo that investors had misinterpreted his remarks had the opposite effect.
This week, Bernanke didn't say much, leaving investors to comb through inflation numbers to surmise whether the Fed's policy committee would raise rates later this month. The data proved almost as enigmatic as, well, a chairman of the Federal Reserve; after a midweek rally, the markets ended the week on a mixed note.
Fretting Fed watchers forget that early-term troubles are normal. Paul A. Volcker faced inflation rates higher than 10% for more than a year after he started the job in 1979. Even Alan Greenspan didn't become a mythical sage overnight, enduring the worst single day in the history of the stock market shortly after he took office in 1987.