Other questions? I think it might be helpful to flag just a few things about which I would particularly appreciate the Committee’s advice. The first is the issue that President Plosser was discussing, which is alternative A—not specifying a range or a target—or alternative B—specifying a range. I think that the argument for specifying a range is that it seems a little clearer. If you look at, for example, the Japanese experience, even when they were in quantitative easing, they still had a target for the call rate, as I understand it. There are some counter-arguments, which Governor Duke and others have raised, about the impact on banks and so on. That is question number 1. Question number 2—and this doesn’t preclude other points, of course—is that in paragraph 3 of alternative B, for example, we have bracketed just for your reference the risk of inflation’s declining below optimal levels. I would be interested to know your views on whether or not to include that bracketed phrase.
Third—again looking at alternative B—in paragraph 4 we have the conditional statement that “weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate.” A little informal polling suggested that people were sort of okay with this way of stating the conditionality. But if there are any concerns about that or, alternatively, if you would like to include a reference to disinflation as one of the conditions, that is just something I want to flag as a question.
A fourth and final point I want to flag—and President Yellen pointed this out to me—in paragraph 5 we have a sentence saying that “the Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities.” I think to put that in there we should feel that sometime in the next few meetings there is a significant chance that we would in fact engage in some kind of a program. We don’t want to put it in there if it is a complete red herring.
So those are four points that I have, but of course, you may have other questions or issues that you want to raise. Governor Duke.