Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

The bleak outlook calls for aggressive action. With the effective federal funds rate already well below our target, there is a logic to moving to the floor at this meeting and redirecting attention to nontraditional policies. Thus, I am comfortable with alternative B and would reduce the interest rates on required and excess reserves to 25 basis points.

In terms of the questions that the Chairman just posed, I am comfortable specifying the range of 0 to ¼ percent. I would actually keep the bracketed information. I am okay with the conditionality. I would remove the reference to the Treasury securities, and for the future I would certainly want to think about expanding the purchase of GSE and agency mortgage- backed securities beyond $600 billion. Also I would support, at a future date, setting a target of 2 percent for the core PCE inflation rate.

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