US Federal Reserve Chairman Ben Bernanke has admitted he suffered a "lapse of judgment" by talking recently to a CNBC anchor, a conversation that caused the stock market to tank when his comments were reported.
Senator. Jim Bunning asked Bernanke about the episode during a Senate Banking Committee hearing on financial literacy.
"Senator, that episode you refer to was a lapse of judgment on my part," Mr Bernanke replied. "In the future, my communications with the public and with the market will be entirely through regular and formal channels."
In a congressional appearance on April 27th, he had raised the possibility of the Fed pausing its two-year, credit-tightening campaign and stocks rallied that day.
However on May 1st, CNBC reported that Mr Bernanke had told CNBC anchor Maria Bartiromo that investors had misinterpreted his recent congressional remarks as an indication the Fed was nearly finished raising rates. Stocks - which had been up for most of that day - slumped.
Mr Bernanke had actually talked to Ms Bartiromo a few days earlier - on April 29th - at the White House Correspondents Association's annual dinner.
Besides raising questions about Mr Bernanke's communications skills, the incident underscored the fact that a single word uttered by a Fed chief can move stock and bond prices.
At yesterday's hearing, Mr Bunning, who opposed Mr Bernanke's nomination as Fed chief, said: "I warned you to be careful about what you say because people are going to follow your words very closely."
AP