This is a rush transcript from "Special Report," April 27, 2011. This copy may not be in its final form and may be updated.


BEN BERNANKE, FEDERAL RESERVE CHAIRMA N: If inflation persists or inflation expectations begin to move, then there is no substitution for action. We would have to respond. I think while it is very very important for us to try to help the economy create jobs and to support the recovery, I think every central banker understands t hat keeping inflation low and stable is absolutely essential to a successful economy. And we will do what is necessary to ensure that that happens.


BRET BAIER, ANCHOR: Fed Chairman Ben Bernanke in the first of his kind, a press conference from the federal reserve chairman. He went on to say that the fed governors expect unemployment to edge downward towards the mid-eight percent range through the end of the year and then gradually decline to 7 percent through the end of 2013. Not exactly rosy. We're back with our panel. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: When you introduced the Jim Angle report on the press conference, you said for the first time the Fed chairman had done something never done before. I thought to myself, speak in English? You know, the Fed is the ultimate Wizard of Oz institution, works behind a scene, it's sort of hidden and mysterious in its actions.

Bernanke's predecessor Alan Greenspan was famed for his obfuscation in his speaking in Congress. I mean his sentences you could not diagram nor explain. And he liked it that way. Bernanke understands that can not happen anymore. A, because of the power of the Fed, and B, because of the criticism in Congress and elsewhere about its actions and direction. The criticism is the so-called QE-2. Which is the printing of tons of money.

BAIER: Quantitative easing.

KRAUTHAMMER: Easing -- Which is printing of money, is devaluing the dollar and creating inflation and a bubble in assets, stock market, and in commodities. And that's gonna be a disaster. He understands, and as a result, there is a lot of pressure in Congress and elsewhere to rein in the power of the fed to have oversight and control, which he doesn't want.

That's why he stepped out, not just to explain what he is doing. But the very press conference that said -- as you said, never done before -- was a way of showing that they want to be accountable or at least open. And the fact that he took the questions on the issue that everybody is criticizing him about, the threat of inflation, and answered it in a reasonable way - his answer was, I know it's out there, I know it's a problem and a threat, but I can navigate, thread the needle here - I think, at least the presentation is meant to reassure the voters and to fend off the efforts and control from Congress.

BAIER: A.B., what about the substance of what he said, the questions about gasoline prices and inflation, and unemployment?

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Well, what he said was not really surprising. I mean that we're gonna see - ya know, interest rates will remain low, labor market is weak, recovery will be modest. That inflation is up slightly, deficit and debt, the most important economic issue, it has to be tackled. Growth estimates were not -- were downgraded a bit, they're not as sunny as they had hoped for.

But I think that Charles is right. For a nonpolitical body having come under such political pressure and criticism, I think that Bernanke did want to come out and sort of push back a little, articulate what the Fed is doing. The criticism has been that members of Congress in both parties, they want -- they don't like the double mandate of the Fed. That they want the Fed to only tackle the control of inflation to keep it stable and low, and not to deal with this maximization of employment. And so, there's been this criticism that the Fed has been in the last year and a half explicitly supporting the policies -- the stimulus policies of the Obama administration.

BAIER: And there are some congressmen, like Ron Paul, who want to abolish the Federal Reserve.

STODDARD: Right. And I think what he did -- when he came out today, he said they're gonna finish quantitative easing and it's going to expire in June. They're not going to stop it right now. But I think he did try to make clear, and I thought it was interesting, that he sees that he has two mandates -- the Fed has two mandates, but that the control of inflation is the more important mandate. And that really, he really admitted and conceded there is not much he can do about long-term unemployment. Just broadly it can help somewhat in the short-term.

BAIER: Fred?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Ya know, I was reminded of that response by Samuel Johnson, when a friend said he just heard a woman preach. Ya know, when Johnson said, a woman preaching is like a dog walking on its hind legs. It's not done well but what's surprising is that it's done at all.

So he had a press conference. And I thought he said practically nothing that hasn't come out of the Fed before and we knew what was coming there. He sort of downgraded the Fed a little bit because, you mentioned gas prices, he said, well we can't do much about that. And long-term unemployment, well ya know, not there either, can't do much there.

And Peter Barnes asked that question about, ya know, the S&P and what it said about a negative outlook on American debt. And he didn't have much in response to that either. I mean he seemed to me, he was trying to just make sure that nothing slipped out that might somehow affect financial markets in the short run. And if that was his goal, he succeeded.

STODDARD: It was interesting, he also tried to say that the increase in commodity and oil prices, will be -- he thinks they will be temporary. And he tried to blame them for, for this spike in inflation and tried to make clear it was not a result of quantitative easing.

KRAUTHAMMER: I'm not sure he said anything new. It was a political event, he wanted to show he's responsive and I think he succeeded in doing that.

BAIER: That is it for the panel but stay tuned for some unseen footage of the White House Easter celebration.

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