Thank you, Mr. Chairman. Trends evident in the District economy for some time fundamentally are continuing. Specifically, employment is increasing moderately and steadily. Most components of aggregate demand are expanding, and I would note, in particular, strength in nonresidential construction. There has been no significant acceleration of inflationary pressures or ...

Well, you can let me know later.

By about what order of magnitude? I’m just trying to determine whether this was really significant or we’re talking about a tenth or two.

I want to see if I understood something you said that pertained to exhibit 13. I think you said that U.S. exports were stronger than expected—stronger than the models would have predicted in ’06—even though growth abroad turned out to be quite strong. Is that right?

Thank you, Mr. Chairman. Well, as several people have observed—and I agree—I don’t think there’s any significant policy difference between A and B. That’s certainly where I am. From a communication point of view, I have a mild preference for B. I think it’s ...

Thank you, Mr. Chairman. Well, as just about everyone has said—and I certainly agree—the near-term outlook is grim. Virtually all the anecdotes of any consequence that I have received recently have been negative. Payroll employment has been, obviously, dropping significantly; and if you look at the trajectory, if ...

Thank you, Mr. Chairman. Let me make some comments, first about nonstandard policies, then about communication, and finally a bit about the balance sheet, governance, and so forth. With regard to the nonstandard policies, Bill Dudley’s charts 24 and 25 showing the spreads narrowing with intervention and spreads tending ...

Thank you, Mr. Chairman. Well, financial headwinds continue to be a major part of my thinking about the economic outlook. Reasonable people can differ about that issue, but it seems to me that the headwinds are significant and they are likely to persist. Partially as a consequence and partially for ...

Thank you, Mr. Chairman. I’ll start with a few comments about the District economy, which will sound pretty familiar by now. The preponderance of the anecdotes from business contacts that I’ve talked with since our last meeting have been distinctly negative. It’s not just a slowing of ...

I’m reluctantly in favor of this. I won’t elaborate very much. I’m just not persuaded that this is a very valuable contribution, as best as I can judge it. I would be in favor of limiting it to these four countries. I don’t know if that ...

But I thought we were concerned about a shortage of Treasury collateral in the market. So why wouldn’t we want them to sell, and in fact, what are reserves for if they don’t use them in these circumstances?

Thank you, Mr. Chairman. I support reducing the funds rate target 50 basis points and doing it now. I think we ought to take advantage of the situation that has arisen with regard to coordinated action with other central banks. That seems to me to be important and appropriate at ...

Thank you, Mr. Chairman. Well, even before the events of the last several days, I thought that this was the most severe financial crisis, certainly, that I have seen in my career. And the last several days—as well as some of Bill’s comments about possible contagion spreading from ...

But I assume there will be an announcement at some point.

That’s fine.

Yes. I am in favor of this. I just wonder how the marketplace will look at the open-ended nature of this because typically we have dollar magnitudes associated with swaps. It may all go relatively smoothly; on the other hand, it may raise questions about exactly what we think the ...

Thank you, Mr. Chairman. I favor alternative B and the language as displayed here. Let me say a few words about the issue of withdrawal of accommodation, which I’ve been giving thought to and will want to give more thought to over time. Earlier today I talked about the ...

Thank you, Mr. Chairman. Let me make just a few comments about the Greenbook forecast at this point, which I found quite useful for thinking about policy going forward only in part because it is quite close, at least in broad overview, to the forecast I submitted before the June ...

Yes, I’m comfortable with going to 84 days. If it’s workable, I think there would be merit in both 28 and 84.

Thank you, Mr. Chairman. I have just two brief comments. The first one is that I share the concerns that are highlighted by President Yellen’s story with regard to IndyMac. Second, with regard to the TOP, the TSLF options program, I’m not opposed to it, but I must ...

Thank you, Mr. Chairman. Just a few points. With regard to the short- term plan of extending the facilities over the turn of the year and so forth—that is, the MOU and the testimony that goes with it—that is all fine with me. I don’t have any ...

Thank you, Mr. Chairman. Well, first of all, I believe that policy is well positioned for now from a couple of perspectives. For the next quarter or two, I think there is still some potential for significant disappointment in terms of economic growth—but only for a quarter or two ...

Thank you, Mr. Chairman. Well, like some others—maybe many others—I, too, have raised my forecast for growth for this year, basically just extending what’s happening in the first half of the year, and I’ve raised my projection for growth next year marginally as well. Still, I ...

Thanks.

Yes. Bill, on chart 6, just a quick question on the leverage ratio: Do we know how good those data are? I mean, to the best of our knowledge, is that reliable stuff?

I have only two comments. I would drop option 1. I just think it doesn’t do enough to reduce the burdens and dead weight losses. As long as it’s there, there will be a tendency to fall back to it for all sorts of reasons, given bureaucratic tendencies ...

It sounds like an obvious arbitrage opportunity.

My question is about intraday and day-to-day volatility in the funds rate. I would think that as long as we hit the target on average, that kind of volatility wouldn’t have any significant macroeconomic consequences. So why would we care?

Thank you, Mr. Chairman. Well, I have given serious consideration to both alternatives B and C, and I think a credible case can be made for either one. There are, of course, risks associated with adopting either one as well. On balance, I come out in favor of alternative B ...

Thank you, Mr. Chairman. Well, for some time I have been using the headwinds period of the early 1990s as a frame of reference for thinking about credit conditions, economic growth, and inflation prospects for the next several years. I won’t belabor that comparison much this afternoon, except to ...

Thank you.

Well, sorry. The more fundamental question is that I have been trying to get comfortable with an outlook that would have core inflation leveling off and maybe declining a bit, and that’s the forecast I have. But I took your presentation, which I think was certainly on the right ...

“Services” seems like the least likely spot actually.

Dave, I have a couple of questions. One is technical, and one is a little more substantive. The technical one is that you have a very sharp decline in consumer spending on services in the fourth quarter of this year and then not much of a recovery in the first ...

Thank you, Mr. Chairman. Well, as somebody said recently, there are no altogether good choices. I strongly support the recommendation and the language that goes with it. A couple of weeks ago I thought the funds rate probably should go to 2½ percent. I got there basically by saying, well ...

Thank you, Mr. Chairman. Well, the baseline forecast in the Greenbook looked to me a lot like the 2001 recession experience—very brief and very mild. If things turn out that way, we will have been very fortunate, frankly. The forecast I submitted at the last meeting was lower than ...

Thank you, Mr. Chairman. We had a fairly extended discussion yesterday about concerns about the condition of various financial markets and some financial institutions and their implications for the economic outlook, and I certainly share those. In this environment, I favor alternative B—a 50 basis point reduction in the ...

It was close. [Laughter]

Thank you, Mr. Chairman. Let me talk about the economic outlook. My initial comments are organized kind of along the lines of Dave Reifschneider’s exhibit 1. There are certainly still some positive things going on: growth in exports, and I think that is likely to continue; strength in the ...

Thank you, Mr. Chairman. I largely share your assessment of the situation and certainly support this action and taking it now. What has really caught my attention is the breadth of the weakness of the incoming data and the extent of the financial problems, some of which Bill Dudley covered ...

Thank you, Mr. Chairman. I largely share your assessment, so let me just make a few comments about the situation as I see it and about the timing of our action here. I have talked frequently, of course, about the resilience of the economy. But I need to remind myself ...

Thank you, Mr. Chairman. Well, I think we clearly should be reducing the federal funds rate at this point. While I think it is a close call, I guess I would come out with doing a quarter at this meeting. Basically, I get there by just trying to weigh the ...

Thank you, Mr. Chairman. It probably goes without saying that I think the main development since the last FOMC meting has been the renewed deterioration in some of the financial markets. In the absence of that—that is, had financial market conditions either stabilized or continued to improve as they ...

Dave, I’m having difficulty reconciling the employment and hours data for the current quarter with your forecast of no growth whatsoever. It seems to me that, even if domestic final demand doesn’t grow or grows little, we still have inventories and exports that could take up whatever output ...

Thank you, Debbie. I couldn’t even hear myself there for a minute. The first has to do with the diagnosis of the problem. I don’t pretend to have great insight into that, but my sense is that this is more of a capital, balance sheet, credit loss problem ...

Thank you, Mr. Chairman. Well, I have serious misgivings about this proposal and wouldn’t proceed with it at this time. There are several reasons for that. I won’t go through all of them. Let me just mention a few.

Thank you.

Okay. So it’s a package deal.

Well, it wasn’t clear to me from what you said whether the ECB wanted the swap line only if we subsequently went ahead with the TAF or whether or not we went ahead with the TAF. I am just not sure.

I was actually about to offer up a question as well, but if you want to defer those, that’s fine.