By Yali N’Diaye

WASHINGTON (MNI) – A request for questions to be posed to Federal
Reserve Chairman Ben Bernanke in Wednesday’s first of a series of
quarterly post-FOMC news conferences brought in many besides those
directly concerned with the second round of quantitative easing.

Questions submitted after Market News International began
soliciting them last week through midday mainly reflect concern over
inflation, whether due to the accommodative monetary policy, accumulated
government debt, rising commodity prices or a weak U.S. dollar.

While not Bernanke’s first news conference, it will be the first
post-FOMC news conference and a rare opportunity for reporters to take
questions about Fed policy right to the top for immediate answers.

The proposed questions also ask for clarification on the exit
strategy, both as to timing and in terms of strategy, and whether the
central bank is considering an additional round of quantitative easing.

Noting that New York Federal Reserve President William Dudley said
a year ago that “an extended period of time” meant “at least six
months,” one questioner asked whether this still applies.

Also touching on the timing issue, a questioner asked how long the
Fed intends to use its ability to pay interest on excess reserves “as a
policy tool to contain inflation” and how much time it will take to
“unwind the balance sheet off its Treasuries.”

Turning to the Fed’s exit strategy, Bernanke was asked “to explain
how he plans to exit from QE2″ without entering a new round of
quantitative easing.

The same questioner expressed concern about government debt-related
inflation.

Inflation was, in fact, the main worry evidenced in the submitted
questions.

“Do you think full employment could be pursued better by the
legislature than with easy money policies and inflation,” one questioner
asked.

“Have we moved past the risk of deflation or too low inflation,”
another inquired. “Is too high or too low inflation the greater risk?”

One economist even asked whether the inflation and the growth
mandates of the Fed are “equally weighted with respect to policy.”

Another wondered whether “reducing unemployment by a percent or two
(is) more important than sky-rocketing food and energy inflation and
weakening of the dollar and its long term consequences?”

A few others mentioned the weak dollar, one asking whether it is
possible that the Fed “waits” before raising its policy rates “even if
inflation crosses 2% and DXY remains weak,” referring to the dollar
index future.

Concerns over inflation’s impact on savings and consumers’
purchasing power were also raised.

Bernanke was asked to respond to the following statement: “The Fed
is encouraging inflation while wages will not be able to keep up
implying a purposeful lowering of our standard of living.”

One questioner asked whether the Fed chairman believes “current Fed
policies are punishing pensioners and savers, since their wealth is
diminished through inflation?”

“Do you consider the stock market a better representation of wealth
than a savings account,” another asked.

“Is the Fed promoting risky stock investment over secure fixed
income for common folks,” one added.

Fiscal policy also showed up among the top concerns, with one
questioner asking whether fiscal policy is “a tailwind or a headwind for
the economy for the balance of 2011.”

Reporters will assemble at the Federal Reserve headquarters
cafeteria after the 12:30 p.m. statement issued by the FOMC following
its two-day meeting is made public. The press conference will begin at
2:15 p.m. ET and is expected to be widely broadcast by financial news
cable TV channels. It will also be streamed live by the Fed itself, on
its federalreserve.gov site. Fed officials have said reporters will
simply raise their hand to be recognized and questions will not be
submitted in advance.

** Market News International Washington Bureau: 202-371-2121 **

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