Thank you, Mr. Chairman. I suppose I could just support the comments that President Yellen made and shut up, but I won’t. [Laughter] I recall in previous meetings that I said that increases would be harder and harder to justify, and I certainly expected that by this time we ...

He had to rub it in. [Laughter]

Thank you, Mr. Chairman. Mid-May in an election year is a good time to look at the effect of the fiscal budget on the economy. In an election year, any legislation that has not largely moved toward passage by Memorial Day likely is not going to happen. We have seen ...

Thank you, Mr. Chairman. I support both the ¼ point increase and the statement. I remind my colleagues that in the last two meetings we will have now removed the terms “accommodative” and “measured,” and in combination, that’s a very significant move forward. We have left ourselves at the ...

Thank you, Mr. Chairman. The surprise of the fourth-quarter GDP number and the slightly elevated inflationary pressure have caused us to take, I think, a closer look at the underlying strength of the economy. And to an extent it is reassuring—certainly, the strength in industrial production and real personal ...

Thank you, Mr. Chairman. First of all, I support the ¼ point increase. We have passed over fairly quickly, except for a couple of instances, the impact of removing the “accommodative” language, which I think is very significant. And I am reminded, based on past experience, that when we make ...

Thank you, Mr. Chairman. At each of our last eleven or twelve meetings there has been a presumption in the analysis for several more moves of tightening. And while I agree that a ¼ point increase in the funds rate is appropriate for today, I no longer find in our ...

I support the recommendation, Mr. Chairman. With respect to the language, what I think I’m supporting is the process by which we will be looking at what changes would be appropriate. But I certainly agree that the next meeting is the appropriate time to look at it and that ...

Thank you, Mr. Chairman. In preparation for today’s meeting, I surveyed the CEOs of three large regional banks in the Southeast, the head of the Bankers’ Bank in Texas, and a banker in Biloxi, Mississippi, hoping primarily to get an idea of the rate of recovery, although to a ...

Mr. Chairman, I continue to support alternative A. I would emphasize, however, in any description of it that it is a vote for leaving the funds rate unchanged as opposed to a pause. Indeed, that is what the wording would say—that we deferred further policy firming in light of ...

Thank you, Mr. Chairman. Dave Stockton’s introduction today suggested that this Greenbook analysis was a combination of the use of judgment and models. And as I reviewed the input, I noted it reflects that combination.

To wit, the Greenbook said that Katrina will restrain economic activity for the remainder ...

I support both the new target level and the language in alternative B. On paragraph 3, I did not try to compare it word for word with the previous characterizations, but my sense is that this is a significant change from the pattern we’ve used in that paragraph, and ...

Thank you, Mr. Chairman. August of the off-election year is a time when we can take stock of how the Congress has responded to certain issues. As we began this year hopeful that Congress would address some issues that had important fiscal policy implications, I think now is an appropriate ...

I support the recommendation.

Thank you, Mr. Chairman. As Susan indicated, I, too, looked at the mortgage market in anticipation of the theme of our discussions yesterday. But I also had a concern about the extent to which the mortgage market might be creating froth in the market. I interviewed several of the largest ...

That’s true. That’s a good point. Thank you.

Well, that’s a good question. I think the statement was as to the flow.

The planet was Earth. [Laughter] The country was the United States. And the person making the observation was talking about sales of the nonconforming product into what they see as a growing and undisciplined secondary market.

There are two parts to that. One is the overall impact on the model. The second is that, to the extent there is risk embedded in the underlying mortgages, it would tend to be where the run-up has been higher. I’m going to talk a little bit about that ...

I see.

Yours is. But is it the aggregate divided by the number of housing units? I would think that there would have to be an implicit weighting in your calculation. If, in fact, the decline in value—the Nasdaq effect, in other words—were to represent a return to normal from ...

With Josh’s 20 percent, I assume that there is an implicit weighting, is there not? Would the 20 percent increase in value reflect to some extent the greater run-up in value in areas like California where there are large numbers of properties that have increased significantly more in value ...

I have a couple of questions. First of all, concerning the scenario of a 20 percent decline in housing prices: Is that weighted to any extent? Is it weighted so that it would reduce the froth or the increased valuation that had occurred up to a certain point? Or would ...

Thank you, Mr. Chairman. First of all, I will support the ¼ point increase in the funds rate and the language of alternative B. As I read through alternative B, I think it communicates what we want to communicate. It says that the pace of spending growth has slowed and ...

Let me point out that it isn’t how they do but how they communicate what they do. [Laughter]

It has been 17 years, Michael. It has been a long time.

I’m inclined to support those of you who have already spoken to the strength of the underlying fundamentals and who believe the output gap is continuing to close slightly. I think we clearly communicated in the last ...

Thank you, Mr. Chairman. In preparation for this meeting, I talked with contacts at two large banks. As all of us are aware, bank asset quality throughout all of 2003 and 2004 continually improved to the point where by the end of last year almost all bankers said in their ...

Thank you, Mr. Chairman. I also agree with the ¼ point increase, and I know there’s a lot of anticipation looking forward to the May meeting. I look forward to it now with some trepidation. [Laughter] I am fearful that creativity may be epidemic by the time we get ...

Thank you, Mr. Chairman. In my comments I want to follow up on President Guynn’s and President Lacker’s observations about speculative housing investment. We have heard increasing anecdotal evidence and concern about this issue, and I think the characterization in yesterday’s Wall Street Journal that day trading ...

I have two comments. First of all, I see the decision as, on average, a four- week acceleration of the release of the minutes, and therefore I think there are two considerations. One is, Is there a logistical problem with early release? Having had Vincent track me down when I ...

I support the recommendation.

Thank you, Mr. Chairman. There are two perspectives that I’d like to add, one from the banking community and the other a follow-up on the fiscal issue. If I were to compare the discussions I’ve had with bankers on what they see in the economy to the comments ...

Thank you, Mr. Chairman. I also support both parts of the recommendation. With respect to the statement, I also think it is appropriate at this time to make as little change in the statement as is necessary, for a couple of reasons. First of all, the markets understand that the ...

Thank you, Mr. Chairman. I will briefly continue on the same subject that Governor Gramlich just discussed because I’d like to talk about fiscal policy issues for a moment. I’ve been encouraged even with the absence of gridlock—or at least to a certain extent the loosening of ...

I support the recommendation.

Thank you, Mr. Chairman. I’ve again had some discussions with contacts in the banking sector in preparation for this meeting, but they tend to reflect the comments that we’ve heard around the room, particularly Governor Bernanke’s observation that the economy’s growth is solid but less vigorous ...

Thank you, Mr. Chairman. In preparation for today’s meeting, I surveyed a major regional bank and two large community banks, one in the Southeast and one in the Midwest. Based on those conversations, I have both some general and some specific observations. In general, commercial lending activity has increased ...

Thank you, Mr. Chairman. In preparation for today, I surveyed three banks—a New York money center bank, a Southeastern regional bank, and a national bank with a Midwest base and a twenty-four-state footprint. I came away with two strong reactions from those interviews. The first had to do with ...

So that ought to work the other way also, on the downside?

Well, let me come at it from the other direction. What is the impact of staying pretty close to the position generally espoused by the Secretary of the Treasury—except for O’Neill who was somewhat more flexible on it—of being supportive of a strong dollar position? The current ...

Coming back to the point that several have made about the frustration with the absence of a response to the external imbalance issue, there has been talk about a fiscal policy response and even a monetary response in the instance of a disorderly threat. My question—and I asked this ...

Thank you, Mr. Chairman. I, too, support the recommendation, and I’ve

been looking carefully at both sentence 8, which Cathy talked about, and the March FOMC

statement shown in alternative B. If I compare them word-by-word or even phrase-by-phrase, I can

see only minor differences—primarily the removal of ...

Thank you, Mr. Chairman. I’d like to discuss two data points: one a survey

of bankers and the other an update on fiscal policy. I surveyed a large money center bank, a large

regional bank, and a smaller Midwestern regional bank. I was surprised to find that they all ...

Mr. Chairman, if it is a close call as to whether or not we would bring the inflation risks into balance—and I think it is a close call—then I have a strong preference for changing the statement as little as possible. It seems to me that, in the ...

In preparation for this meeting, I focused again on business C&I loans, and for the first time in the two-and-a-half years that I have been following that information source, we are starting to see some measurable growth. It would be one thing simply to report that, but it’s quite ...

Right.

I would be inclined at least to emphasize that we recognize the importance of communication. My concern is that this sounds as if we’re suggesting that our work on communication issues has been concluded. I don’t have precise wording to suggest, but I think we want to emphasize ...

I support both parts of the proposal. But I would echo what Governor Bies and Mike Moskow said. Implicit with the introduction of the words “considerable period” was the need at some point for an exit strategy. And in my view even with the term “patience” we will need an ...

President Broaddus used the term “bottoming out,” and I think that expression also applies to the two issues that I want to discuss—fiscal policy and the banking system. First, with respect to fiscal policy, you undoubtedly know that the omnibus spending bill passed the Senate last week and was ...

The memo mentions the question of whether or not an MPR without a forecast would comply with the law. That’s an open question.