Federal Reserve Chairman Ben S. Bernanke seemed a little nervous at his June 19 news conference. His recent comments about the future course of monetary policy had rattled investors and driven bond yields up, tightening financial conditions in a way the Fed didn't want. Formally unperturbed, Bernanke said he was leaving policy unchanged — but in trying, yet again, to elucidate the Fed's thinking, he tacitly admitted that something had gone wrong.
Fortunately, the policy itself, I think, is basically good — but that's despite, not because of, the ever-evolving formulas used to explain it.
Growth in the United States is still sluggish, unemployment is still high and inflation is (a) running well below the Fed's target and (b) falling. That suffices to justify interest rates at zero until further notice, together with additional large-scale asset purchases — which is what the Fed intends.