April 27.

Mark the date in your diary.

It’s the Federal Reserve’s first quarterly news conference — Ben Bernanke’s chance to answer his critics and speak up for his policies (and opportunity for the fourth estate to indulge in a spot of Fed bashing).

It should be fun and a special Markets Live with guest is a distinct possibility.

In the meantime, Goldman’s chief economist Jan Hatzius has been imagining how the presser might go and the answers Bernanke might give.

Here are the most interesting ones (with comment from Hatzius and his team, who — one suspects — rather fancy the job of running US monetary policy).

Q: Why did you decide to start holding press conferences?

Bernanke: Academic research has shown that central bank press conferences can be helpful in communicating central bank decisions. For example, Ehrmann and Fratzscher (2009) find that ECB press conferences have on average had larger effects on financial asset prices than the corresponding policy decisions, but smaller effects on volatility.1 Thus, we view the move to press conferences as another step on the road to clearer communication.

Q: Will QE2 end in June?

Bernanke（伯南克）: Based on the information available at this time, the risk of deflation has gone from small to negligible, and most indicators of economic activity point to a sustainable recovery. In such an environment, we believe that a further easing of monetary policy via additional large-scale would not be appropriate.

GS（高盛）: Our own view is that the risk of deflation has certainly fallen but that the term “negligible” is too strong. If the economy were to slow anew to a belowtrend growth pace, deflation concerns could resurface. But that’s neither here nor there with respect to the committee’s decision whether to end QE2, which seems to have been taken.

Q: Professor John Taylor argues that his eponymous monetary policy rule currently implies a need for tighter monetary policy. Is he right?

Bernanke: We would take a different view. As I explained in my answer to Sen. Toomey’s question at the semiannual monetary policy testimony to Congress, there are different versions of the Taylor rule and there is no particular reason to choose the one that Taylor picked in 1993, which he now argues shows that Fed policy is too loose. In the past, Taylor himself has suggested that other formulations are possible. Our own work on this issue using models that explain the FOMC’s past behaviour suggests that the funds rate currently “should” be well below zero, at least under our forecasts for inflation and economic activity.

GS: We agree.

Q: The Federal Reserve is currently buying 70% of the net supply of Treasury securities. Once the purchases stop, some influential market participants expect a sharp increase in Treasury yields. Are they right to be worried?

Bernanke: We don’t think so. We believe that the impact of LSAPs works via the stock of securities held by the Federal Reserve, not the flow of purchases. This distinction sounds like a technical detail, but it is actually very important. If it is the flow of purchases that matters for the level of interest rates and asset prices, interest rates will rise as soon as the flow goes from the current $75bn-$80bn per month to zero. But if it is the stock of purchases that matters, rates will only rise once we announce a reduction in our securities holdings.

GS: Again, we agree with this, as explained in more detail in Thursday’s US Daily. However, neither we nor the chairman can be sure that it is the right answer—after all, there are some very astute and successful investors who believe the precise opposite! And in order to be sure, the FOMC will want to leave at least a couple of months after the end of QE2 before it takes the next step toward a tightening of monetary policy. This means that even if the data are strong, it is unlikely that the committee will want to stop the reinvestment of MBS paydowns and/or make a change in the “extended period” language in the FOMC statement until a couple of meetings later.

And finally…

Q: When are you going to raise rates?

Bernanke: I can’t tell you that!