Is Bernanke Secretly Still Conducting Monetary Policy?

There have been news reports the last few days about how Ben Bernanke, in his post-Fed Chair capacity, has been going around giving speeches, getting paid gobs of money in privet to hedge funders.

Obviously a lot of the focus has been on the fact that Bernanke is getting paid more per speech than his annual salary as head of the Federal Reserve.

But a chart sent out to clients this morning from Torsten Slok sheds a different angle on what's going on.

The chart shows essentially that for the last several years, interest rates have been entirely driven by Fed communications. Rates fall when it looks like the Fed will stay low for a long time. Rates rise when the Fed hints that a rte hike might come sooner.

What's really interesting though is the final arrow in the chart: "Bernanke dinner talk."

One of the things Bernanke has been saying, reportedly, is that we'll be in a low rate environment for an extremely long time. And alas, rates have been falling again.

If the primary mechanism of the Fed is communication - and it is, since interest rates are at zero and they can't be cut further - and Bernanke's communications are still influencing the market, then it stands to reason that we have something of a shadow Fed chair, who is still conducting monetary policy, in secret meetings with wealthy investors.