If you’re wondering why Fed Chairman Ben Bernanke is being cagey when it comes to discussing when and if interest rate hikes will end, and for how long, take a look at the dollar.
The almighty greenback looks something less than invincible these days. The U.S. Dollar Index is off by roughly 5% from mid-March. The decline was unfolding for much of April, although the sellers found inspiration anew after Mr. Bernanke’s suggestion last week–ever so carefully worded–that the central bank’s rate hikes of the last two years may pause, if only temporarily, at some point in the near future.
As we wrote on Friday, this “new transparency” from the Fed chief isn’t quite the epitome of the clarity that Bernanke has formerly embraced as the ideal for the central bank. To read his speeches of years past one would think the man atop the central bank would settle for nothing less than unambiguous broadcasting on the matter of monetary policy. Then again, perhaps his subtle retreat from that position is unsurprising, considering the delicate balancing act Bernanke faces in navigating the increasingly rocky shoals of monetary policy in the months and years ahead.

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Here’s a news flash for Congress: there are no quick fixes. That statement of fact won’t stop the pandering, but we’re still of the belief that checking in with the truth as it exists, rather than as pols imagine it, is healthy.
Easier said than done. True to form, politicians are inclined to find a silver lining in an otherwise threatening cloud. When the cloud is energy, the knee-jerk reaction in Washington is to make grand proclamations that have no immediate relevance (such as President Bush’s claim that America should decrease its dependence on Middle East oil), or else devise near-term “solutions” that are short on solution and long on drumming up votes.
The latest examples comes by way of the $100 rebate plan backed by the Republicans, which was spurned by at least one Democrat in the Senate as being ineffective, albeit by offering too little. Accordingly, the Democrat upped the ante and suggested a $500 rebate.

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