19 Central Bankers Walk Into a Bar....

By Sarah Chaney Features Dow Jones Newswires

America's central bankers met in 2012 to debate changes in monetary policy, including a third round of bond purchases aimed at boosting the still-fitful economic recovery. Still, the officials found a few opportunities at the Federal Open Market Committee meetings to poke fun at one another -- and find humor in such comedy-rich topics as financial markets, monetary policy and economic modeling.

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The 2012 transcripts, released Friday, noted 247 moments of laughter across eight meetings. (They're marked by a "[Laughter]" tag in the transcripts; we're not kidding.)

We've collected some of the best and worst cracks. Our background information and analysis is in italics. The rest are direct quotes from the transcripts.

( Note: all job titles refer to positions held at the time of the transcript)

January 24 -- 25

Before the FOMC makes important decisions on the adoption of a formal inflation target, Fed Chairman Ben Bernanke announces the retirement of economist Lawrence Slifman, senior adviser in the division of research and statistics, remarking on his relative youth -- in Fed years.

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CHAIRMAN BERNANKE: Good morning, everybody. I'd like to start by recognizing our colleague, Larry Slifman, who is at his last meeting before his planned retirement. Larry is still fairly junior, having been on the Board staff almost 42 years. [Laughter]

Mr. Bernanke adds a dash of mathematical humor.

CHAIRMAN BERNANKE: He has attended 183 FOMC meetings over 30 years. At one day per meeting, that's almost exactly six months of FOMC meetings. [Laughter]

Later, Mr. Bernanke turns to Janet Yellen, vice chairwoman, for the nomination of someone to chair the FOMC meeting.

MS. YELLEN: I would like to move the nomination of Ben Bernanke as Chairman.

CHAIRMAN BERNANKE: Second. Other nominations? Any objections? [No response] Thank you, once again. Avoiding primaries, I'm glad to say. [Laughter]

March 13

After a coffee break, the meeting recommences with comments from Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis.

MR. KOCHERLAKOTA: Thank you, Mr. Chairman. I'm especially grateful that you allowed my colleagues around the table a chance to get some coffee before listening to me. [Laughter] Useful input for them.

Later in the meeting, Fed governor Elizabeth Duke launches into a discussion on the psychology of the housing market.

MS. DUKE: ...Once prices seem to be rising, and buyers have lost out on homes that they had already imagined as theirs, they stop looking for bargains and focus on the house they really want. And to illustrate this, in case you think I'm overestimating that, I'm going to offer a final data point. Friday, I had lunch with Governor Yellen, who expressed that she might be interested in buying rather than renting. Over the weekend, while I was studying my Tealbook, Governor Yellen found a house she was interested in buying. On Monday at lunch, she told me all about how beneficial it would be for her to buy rather than to rent. And as we sat down for this round, she told me that she was considering making a higher offer because someone had come in and bid higher on her house.

MR. KOCHERLAKOTA: She must be worried that interest rates are going up. [Laughter]

MS. DUKE: Now, this is someone with a very informed forecast of economics.

MR. FISHER ( Richard Fisher, president of the Federal Reserve Bank of Dallas): It's like the Case-Shiller index -- we now have the "Yellen index." [Laughter]

April 24-25

John Williams, president of the Federal Reserve Bank of San Francisco, speaks about his staff's research on the declining labor-force participation rate and what it means for the economy. Economists, he recognizes, aren't the youngest folks.

MR. WILLIAMS: ... They found that about half of the recent participation drop came from aging workers, some of whom may be retiring early in the face of a bad job market. The remaining half came from abnormally high labor force withdrawals among two groups: youth; and adults between the ages of 25 and 54 -- I call them "the young." [Laughter]

June 19-20

The FOMC meets and announces plans to extend through the end of the year the Operation Twist program, which aims to drive down long-term interest rates by selling short-term securities and using the proceeds to buy longer-term securities. Mr. Bernanke also introduces two new Fed governors.

CHAIRMAN BERNANKE: Good morning. I would like to start by welcoming two new members to the table, Governor Jeremy Stein and Governor Jay Powell, sitting over here in the delinquents' corner. [Laughter]

Bernanke, who served as chairman of Princeton's economics department, continues the introduction.

....We welcome our two new distinguished colleagues and look forward to collaborating with them and learning from them. I am optimistic because I note that they both got their B.A.'s from Princeton University. [Laughter]

July 31-Aug. 1

At this meeting, the FOMC signals it is getting closer to launching a new round of stimulus. Some of the central bankers got creative with their economics metaphors. Take, for instance, this remark from Federal Reserve Bank of St. Louis President James Bullard:

MR. BULLARD: Monetary and fiscal policies are like having a gorilla in your living room with your family hanging around. It's much better if the gorilla is not jumping up and down. [Laughter]

Or this remark from governor Elizabeth Duke:

MS. DUKE: I think yes. I feel like an Excel spreadsheet caught in a circular reference. [Laughter]

Sept. 12-13

The FOMC meets and announces the third round of quantitative easing. Despite the serious subject matter, there was still humor to be had, this time from Ms. Duke.

MS. DUKE: At some point, demographics win. Those kids now living at home with their parents will not stay there until they're 40. [Laughter] And when they do form households, they're going to require housing units, whether rental or owner occupied.

Oct. 23-24

At this meeting it is clear that Mr. Kocherlakota, a scholarly Ph.D. economist, knows his audience:

MR. KOCHERLAKOTA: Financial markets continue to exhibit levels of risk aversion that I would have to say are extraordinarily high. The 20-year real (Treasury inflation-protected securities) yield is essentially zero. This means that on the margin, investors do not see any investments better than giving up a unit of purchasing power today for a unit of purchasing power 20 years in the future. Now, as somebody who has spent much of my life teaching about the time -- value of money, I find this quite disheartening. [Laughter]

Of course, sometimes economists opt for sports humor in lieu of nerd humor. Take Mr. Williams:

MR. WILLIAMS: In my remaining comments, I am going to focus on the risks to the outlook. Of course, the number one risk to the U.S. economy is determined by the outcome of the World Series. [Laughter]

For whatever the macroeconomic impact was, the The San Francisco Giants won the 2012 World Series, sweeping the Detroit Tigers in four games.

Dec. 11-12

The FOMC meets and announces it will continue purchases of long-term Treasury securities it began under Operation Twist. The central bankers continue with their analogies.

MS. DUKE: There is an analogy I was going to use to a holiday movie, and I was a little embarrassed by it, but if (Dallas Fed) President (Richard) Fisher is willing to make his barnyard analogy [laughter], I'll move ahead with mine. In the movie It's a Wonderful Life, they keep saying that every time a bell rings, an angel gets its wings. So to make a somewhat cheesy comparison, I think that every time home prices tick up a notch, a household pops above water on its mortgage and so regains its financial wings.

Write to Sarah Chaney at sarah.chaney@wsj.com

(END) Dow Jones Newswires

January 05, 2018 16:22 ET (21:22 GMT)