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

Thank you, Mr. Chairman. If we were still working with the framework of targeting the fed funds rate, I would prefer D, and I would accept C, and I would vote accordingly. But I think what I’ve heard in the past two days is that we have really abandoned that framework, and this is kind of a ratification of that. I think that our framework now is actually in A and B in the statement that we are going to “expand its purchases . . . as conditions warrant.” If that’s the case, then going with A, in which you don’t set a fed funds rate or talk about it, is probably preferred.

I also think that we’re now in a credit policy type of framework, and it bothers me. I have a lot of sympathy for what Presidents Lacker and Bullard said. I would prefer, rather than a statement that says “as conditions warrant,” that we have some kind of a monetary base criterion for the future. This is something that we ought to think about. At the same time, I do not think that we should have inflation below optimal in this statement. I don’t think we’re there, and, at this point, I think it should not be hinted at.

I think that “purchasing longer-term Treasury securities” goes with the conditionality statement anyway. We’ll do what it takes, and if it takes purchasing longer-term Treasuries, that’s it. That is what we have unless we go back and look at a new framework that we need to get out and talk about with the public, and I hope that as our meetings and our discussions progress, we begin to focus on that. Thank you.

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