In his first report to Congress, the new Fed chairman reassured listeners that the American economy was rebounding robustly after a statistical lull in the third quarter. Some astute Fed-watchers took this as a subtle warning to statisticians to produce “friendly” CPI numbers next month, so that the developing, rosy picture is more credibly corroborated by the numbers, most particularly those alleging “productivity gains”. Other observers were quick to point out that America’s negative savings rate and stagnant real income made it most unlikely that any real economic gains had been achieved recently. In fact, they said, the inescapable conclusion was that any economic “growth” said to have occurred, assuming it occurred at all, would have been the result of increased borrowing by consumers from sources outside of the U.S.

No one from the Fed was available to comment on this, although the woman who answered the phone at the central bank’s Washington, D.C. headquarters said, “What are you, some kind of wise guy?” Wall Street investors implicitly shared this sentiment when they pushed the averages moderately higher in dull trading. The Dow Industrials ended the day 30.58 points higher after being down nearly 40 points earlier in the session. Whether the rally is an early harbinger of a “Springtime for Bernanke” efflorescence remains to be seen, however, since the chairman would not rule out the possibility of further increases in administered rates. He said that any decision about this will be based on the statistical picture of the economy that emerges over the next few months. Some Fed-watchers took this to mean that the Fed would consider a Stalinist-style purge of the Labor Department if it fails to come up with “correct” statistical numbers going forward.