Thank you, Mr. Chairman. I thought I’d provide just a couple of perspectives, first on the 2006 economy and then, by extrapolation, on the trends in ’07. With respect to 2006, I think the economy outperformed market expectations and Greenbook expectations, for probably at least four reasons. The first ...

Withdrawn.

I apologize for the bad English that I offered before, but an alternative to the first sentence that you read that would, I think, be English to Jeff’s fair point—it would be to delete the word “target.” So it says, “To establish a range for the federal funds ...

Thank you, Mr. Chairman. As others have said, the choice among these alternatives, particularly A, B, and C, is not really a choice about the effective rate. It’s a choice about our clarity, our conviction, and maybe most important, our readiness in announcing a new regime. As I described ...

Thank you, Mr. Chairman. Several quick points. First, the latest leg of deterioration, which began in mid-September, is showing few signs of abating, as Governor Kohn suggested. I think the November retail sales data look like a head fake. Revisions to September and October, as the Greenbook suggested, make us ...

Thank you, Mr. Chairman. I’m a visual thinker. [Laughter] So I’ll begin where Governor Fisher ended his remarks. To thank Brian, David, and Nathan for two reasons: First, obviously I thought you did a great job, and second, I didn’t want to be the first jerk around ...

Thank you, Mr. Chairman. Let me begin by agreeing with Don Kohn on two things. This is the toughest economic period I can remember in his lifetime, [laughter] and I support alternative A. I think the inflation trends and the trends in the global economy give us flexibility, which six ...

Thank you, Mr. Chairman. The first sentence of the Greenbook said that “recent economic and financial news has been dismal”; and the last sentence on page 1 of the Bluebook said that “markets generally remain extremely illiquid and volatile.” I can’t do better than that, but I can certainly ...

Mr. Chairman, I support the proposal on the floor. I think the safeguards are meaningful and real and should help. I think the bar for further consideration, as Nathan described, should be high, but we shouldn’t overstate what that bar is, given how circumstances can change quickly. I wouldn ...

Thank you, Mr. Chairman. Let me make three brief points. First, on financial markets, I think Bill described them accurately as a mess. I guess to amplify that comment I’d say that what appears now in financial markets is that the thesis we’ve been talking about—that this ...

Yes, sir.

Mr. Chairman, I would support “carefully.”

Well, we have done things like “in a timely manner” and other kinds of phraseology.

Keenly? Carefully?

I think the sentiment we are trying to suggest is watchful waiting. We are not indifferent, we are not clueless, we are paying attention, but we are not predisposed. Hence, Governor Kohn’s suggestion.

Let me ask Brian and Bill. Brian, without “closely,” how do you think the markets will react to that?

On “closely”?

My sense is—and this is certainly open for discussion—that we want the focus to be that we are really watching market developments closely. We are not trying to monitor the broader economy, which we might not be able to measure too much. I will admit that we have ...

Thank you, Mr. Chairman. Let me do three things. I’ll talk first about a modal forecast but probably give it short shrift; second, about financial market conditions; and third, about policy. Working under the assumption that our modal forecast doesn’t look quaint a week from now, if the ...

Thank you, Mr. Chairman. I’ll be brief. I favor alternative B as written and presented. I think it strikes the right balance by highlighting the risks that we see on the inflation front, and I agree with Brian’s characterization that the capital markets’ reaction might be a little ...

Thank you, Mr. Chairman. I have no material changes to report in my view on the overall state of financial stability, growth, or inflation; but as I talked about at the last meeting, it still is likely to be a long, hot summer, and we’re only about half over ...

Thank you, Mr. Chairman. A couple of things briefly. First, Mr. Chairman, the most important decision that needs to be made—and, again, I defer like others to your judgment—is on the extension of the facilities, given market expectations about what you and others have said about them in ...

Thank you, Mr. Chairman. So just on behalf of the troublemaker caucus, [laughter] let me make a suggestion. It doesn’t strike me as though the deltas between Vice Chairman Geithner’s formulation and what I proffered are that large. That is, I think we collectively agree that we need ...

Thank you, Mr. Chairman. Let me make a few prefatory comments, and then try to answer a couple of the key questions in the memo. First, a crisis is a terrible thing to waste. My sense is that we have an opportunity here to do the right thing over the ...

Not a question, just for the go-round.

Thank you, Mr. Chairman. Let me say just a few things. First, to state the obvious—there are risks on all sides of these decisions. Second, I will try to wade into the debate briefly on this accommodation point. My own view is that policy is accommodative—the degree of ...

Thank you, Mr. Chairman. At this point everything has been said, but everybody hasn’t said it. So let me try. [Laughter] Let me make three summary points, and then I will talk about three issues that I think are harder. First, on the economy, through late May, as the ...

Thank you, Mr. Chairman. Let me add my plaudits to those already expressed on the quality of this work, and then let me confine my comments to the timing and sequencing. First, with respect to the rollout of the white paper, it strikes me that, given that questions have been ...

Governor Kohn shamelessly stole my question. [Laughter]

Thank you, Mr. Chairman. I can support alternative B, but I must admit I can’t do it with the conviction that I would prefer to have. I think market participants will look at our decision today and at the data over the next few weeks and try to measure ...

Thank you, Mr. Chairman. As has been described by most around the table, official data on the real economy suggest weakness but haven’t materially changed since we met in mid-March. Others have talked in more detail about weakening labor markets, poor consumer sentiment, and worrying trends in consumer spending ...

Brian, does “somewhat” mitigate it a little, or does that highlight it?

Thank you, Mr. Chairman. A couple of quick introductory points. First, I have total confidence in the Fed and the FOMC, certainly over the course of my couple of years here, in effectively handling these challenges, which is key to highlight at the outset of my remarks. I have total ...

Thank you, Mr. Chairman. To join the growing chorus in the discussion today, I would say that there are very significant policy challenges across five areas on both sides of our mandate. First, the real economy is materially weaker. Second, inflation risks are quite discomforting. Third, we have genuine issues ...

I’m under the impression—Bill, you correct me—in the earnings call from the investment banks today and tomorrow, the four remaining are going to do all they can to destigmatize this facility with answers to the effect that “we haven’t tapped the facility yet, but we would ...

You’re still going to get questions apparently. [Laughter]

Thank you, Mr. Chairman. My comments will be short. I share the assessment that Bill Dudley and others made in terms of the market functioning, and I think the rolling capital call that we discussed at videoconferences appears to be accelerating, particularly in recent days. The most recent catalyst, as ...

I’d add only that I think where the rating agencies are now is trying to come up with cleaner boxes and better governance—Sarbanes-Oxley types of structures, ombudsmen, liaisons, Chinese walls. The core issues that Mike and his team bring up seem highly resistant to change, but you know ...

Thank you, Mr. Chairman. I support alternative B for several reasons, not least of which because it actually seems to reasonably capture what we talked about yesterday. So I think it has that benefit. To state the obvious, we are in a very tough spot. There are clearly risks on ...

Thank you, Mr. Chairman. I will endeavor to stay out of the growing, creeping pessimism caucus. [Laughter] You can judge for yourselves whether I’ve been successful doing so. Let me talk briefly about two economies that are in a tug-of-war, and rather than reference the housing and nonhousing economies ...

Thank you, Mr. Chairman. Let me just make a few brief points. First, during the discussions on this call, we have described these financial markets as fragile. That strikes me as rather euphemistic for what we have been witnessing really since the first of this year, particularly what is being ...

Thank you, Mr. Chairman. Just a few notes. First, on financial markets and financial market functioning, I think as Bill Dudley suggested that they are much improved from our last meeting. I take that as a very, very good sign, and I think that the improvement in financial market functioning ...

Thank you, Mr. Chairman. I support alternative B as is. Without monetary policy action, it does strike me that the harm to the real economy could be larger and longer than otherwise. Similarly, I would say that without employing the liquidity tools that we discussed when we met by videoconference ...

Thank you, Mr. Chairman. Like many of you, I think that the risks of bad economic outcomes are higher than they were when we met in October, both here in the United States and among our trading partners. The profound deterioration in financial markets—which in my view has changed ...

Thank you, Mr. Chairman. Let me just highlight a few points. First, on the diagnosis of exactly what’s going on in the financial markets, I do think that the deterioration of the financial markets since we last met has been quite remarkable and quite profound. That doesn’t mean ...

Thank you, Mr. Chairman. Let me be the most recent but, I guess, not the last to say that this is a close call. I suppose I take more comfort in that than some around the table because I am pleased at the progress though it is not perfect and ...

Thank you, Mr. Chairman. I thought I’d just talk about four subjects today: first, spend a few more moments on the capital market conditions, which Bill did a great job of summarizing; second, talk about financial intermediaries; and third and fourth, talk briefly about implications for growth and inflation ...

Thank you, Mr. Chairman. Very briefly, when I think back about a week ago to maybe one of the darker days that we’ve had in the past six weeks, there were so many more institutions that were funding themselves on an overnight basis that it wouldn’t take much ...

I don’t feel strongly, but would it make more sense to have this change be consistent in time with changes in communication strategy more broadly? Now, recognizing this is not of the same import, but rather than have a question be raised and then have to explain it through ...

Mr. Chairman?