Thank you, Mr. Chairman. I don’t know how we would rationalize or explain a departure today from the pause that we decided on at our last meeting. Also, I think that what we have learned since our last meeting does not substantially alter our medium-term forecast. Therefore, I strongly ...

Thank you, Mr. Chairman. Since this is my last meeting, I want to say formally what an honor it has been to serve under your leadership, at least for a short while, and under Chairman Greenspan’s leadership before that. And to my colleagues around the table and around the ...

Thanks.

Mr. Chairman, since I’m not going to be here in October, I probably should sit quietly; but I can’t resist. I think almost everything has been said. I want just to comment quickly on a couple of things. I’m not sure we really talked about a very ...

Thank you, Mr. Chairman. With each speaker, this discussion gets more and more interesting. I think it’s fair to say that anybody who has been involved in the policymaking process for very long has made a speech or talked publicly about how you come to the meeting with your ...

Thank you, Mr. Chairman. In our last meeting I reported that, while our Southeast economy still seemed reasonably solid, we were beginning to pick up anecdotal signs that activity might be slowing. Well, that sluggishness is now gradually showing up in the data as well. The slowing is perhaps most ...

There’s another way to avoid that, I can tell you. [Laughter]

Thank you, Mr. Chairman. Given our recent disappointing inflation experience and, more important, our forecast that suggests that inflation is likely to move at least somewhat higher over the forecast period, I’m solidly in favor of a 25 basis point move today. Like some others, I am less sure ...

Thank you, Mr. Chairman. While recent data show that Sixth District economic activity was solid in the early spring, anecdotal reports for May and June point to some definite deceleration. The deceleration is particularly evident in housing, where an orderly slowing is now noted for the first time in areas ...

Thank you, Mr. Chairman. Let me see if I can be reasonably concise. First of all, I don’t think we have any viable alternative except the 25 basis points of tightening today, so I support that. We’ve probably had more consensus around the table this morning than I ...

Thank you, Mr. Chairman. Since our last meeting, regional data and anecdotal information from our various contacts suggest that the Southeast region economy continues to have good momentum. Let me comment on just a few specific areas where what we’re seeing in our District may help to inform our ...

Mr. Chairman, I support your recommendation. I’m comfortable with the language. Some of the alternative language that has been suggested is attractive. I think we should make as few changes today as we can, and this recommendation does that. I also support the Vice Chairman’s recommendation to wait ...

Thank you, Mr. Chairman. I also have not had the occasion in the public farewell ceremonies to say thank you to you. So let me say what an honor it has been to serve under your leadership and to be associated with the great confidence and respect you’ve given ...

Mr. Chairman, I too support the recommendation for a 25 basis point increase. I’m sure that the process we went through on revising the language in the statement was frustrating to the staff but I actually found it both interesting and constructive. When we’re making changes as significant ...

Thank you, Mr. Chairman. First, let me share a few thoughts on what we’re seeing in our Southeast region. Overall, growth in our District continues at an acceptable pace, with most of the data and most of the anecdotal reports from directors and other contacts being positive across almost ...

Mr. Chairman, there are words and phrases that I’m not as comfortable with as I’d like to be, particularly the part dealing with inflation risk. The word “potential” has crept into the sentence in terms of inflation pressures; I see those pressures as clearly there and not just ...

But we need to have that more than a couple of days before the meeting if we’re really going to have something that’s workable. I guess it sounds like what you have in mind is what I’m hoping we can do. Thank you, Mr. Chairman.

I would push a little bit.

Mr. Chairman, since Vincent has raised the question of process, and I get the sense that we’re probably not prepared today to deal substantively with changing the statement, I’m wondering out loud if we shouldn’t try to go even further than Vincent has suggested between now and ...

Thank you, Mr. Chairman. Let me first share some thoughts on recent economic developments in our Southeast region. As you would expect, we’ve continued to assess the regional and national implications of Hurricane Katrina, and now Hurricanes Rita and Wilma, which have added to our woes.

The recent employment ...

And that will help.

Mr. Chairman, I support your recommendation. I have the same uneasiness I had at the last meeting—perhaps elevated this time—about one part of the statement. I’m not sure that the words about the inflation situation and the risks in the inflation outlook truly capture the tone of ...

Thank you, Mr. Chairman. Obviously, our Atlanta Bank’s attention these past three weeks has been riveted on Hurricane Katrina and its aftermath, because of both our operational responsibilities in the areas affected by the storm and our concerns about the welfare of our New Orleans staff. In addition, we ...

Mr. Chairman, I support your recommendation. While accepting your arguments against fiddling with the wording, I must say that I also would prefer to take the word “gradually” out. And I share Sandy’s concern that, read literally, the phrase “core inflation has been relatively low” could be interpreted as ...

Thank you, Mr. Chairman. Consistent with incoming data on the national economy, business conditions in our part of the Southeast have remained positive since our last meeting. In fact, I found it more difficult than usual to answer the questions: “What has changed?” and “What are we seeing and hearing ...

I support your recommendation, Mr. Chairman.

Thank you, Mr. Chairman. Anecdotal reports from our regional contacts and the most recent data releases suggest that business conditions in the Southeast have remained positive since our last meeting. Florida, as has been the case for some time, has been dominant in terms of both employment growth and the ...

Mr. Chairman, I think we have a conundrum—another one—with a capital C on this language issue. We can’t seem to get unstuck from it. I’ve probably already said enough. I agree with what Bill Poole said, but I’m not sure I understood your response. I ...

Mr. Chairman, I was going to raise this point later, or maybe at another meeting, but I think it’s consistent with the discussion we’re having. I would hope that we don’t foreclose the possibility, long term, of rethinking this entire process. It seems backwards to me to ...

Thank you, Mr. Chairman. I interpret what is characterized as softness in some of the recent data releases as an indication that at least the risks to the path of real output growth, which has averaged 3½ percent since the end of the recession and 4.3 percent over the ...

Mr. Chairman, we’ve obviously begun an important conversation. If it wasn’t evident before, it is now, how painful and difficult this is going to be. I also appreciate the reminder of the need to be sure that we don’t unnecessarily shock the markets as we try to ...

Sorry, Vincent.

That would be my plea.

I have just a quick suggestion: If we’re really going to tackle this in May, we ought to try to get drafts of what we’re going to work with out earlier than a couple of days before the meeting so we have more time to share our views.

We have.

May I try just one more thought? I meant to say this earlier. I think Jerry Jordan, wherever he is on his sailboat, would smile at B5, because I think we’re saying exactly what Jerry tried to get us for years to say: If policy is set appropriately at ...

“Conditional upon the current path of policy, the risks to the attainment of both sustainable growth and price stability are roughly balanced.” To me it combines a number of things I heard around the table. Also, I want to say that I come out of the same cave as Cathy ...

Mr. Chairman, I’m not sure I followed all the alternatives, but let me weigh in on the draft language in cell B5 as well. If we’re going to make that kind of change in the language, I think there’s a better way to do it that will ...

Thank you, Mr. Chairman. Like others, I’ve been both somewhat surprised but certainly pleased at the steady and strong pace of real GDP and job growth we’ve been experiencing.

This positive experience has been mirrored within our Southeast region. For example, regional retail sales growth in January was ...

Mr. Chairman, like Roger, I was in the group originally that was very uneasy about this. But I’ve come to the other side and believe that, on balance, it is probably the thing to do.

Let me mention just a couple of thoughts, without completely repeating what others have ...

Mr. Chairman, I support your recommendation. I would say, again, that I don’t think “moderate pace” actually describes the conversation around the table this morning. But I agree with others that this is not the time to play with a word like that.

Thank you, Mr. Chairman. The meetings with our Sixth District boards of directors were particularly timely this cycle, just concluding at the end of last week. I would note three issues and impressions that came from those discussions.

First, the directors’ general outlook for the economy was decidedly positive and ...

I support your recommendation, Mr. Chairman, including the language.

Thank you, Mr. Chairman. All things considered, the national economy continues on what I regard as a very acceptable pace. Real GDP for the past six months has advanced at a rate of more than 4 percent. This is above the average rate of 3.6 percent we experienced during ...

I support it as well.

Thank you, Mr. Chairman. Like Bill Poole, in searching for words that describe developments since our last meeting I kept coming back to “ho-hum.” We’ve had some mixed readings, as is almost always the case, but no really big positive or negative surprises. And maybe, just maybe, we should ...

That’s helpful. Thank you, sir.

Okay. Now for my observation. I may have not followed your discussion about the labor market and how we deal with it—and maybe this is what Ned was talking about. As I read the statement, it seemed to me that we may have contributed to the emphasis that people ...

Yes.

Mr. Chairman, I support your recommendation. I have one question and one observation. I think I got confused in the course of your exchange with Bill Poole. Is the last phrase under the assessment of risk in or out? I thought there was some question about putting a period after ...