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

All right. So in the spirit of trying to move gradually and not just overwhelm the market, I would like, as I say, to move halfway to where we want to be. There was a slight majority in favor of alternative A, but I’m very concerned that, if we don’t say anything about the funds rate, there is just going to be confusion. I am also concerned about the view that President Yellen, Governor Kroszner, and others raised if we sort of say that we’re not targeting it anymore. It suggests that we’re indifferent to the rate or that we have no ability to raise it. What does it mean to say that rates will be kept low for a long time, if we don’t have some view on that? Again, I would cite the Japanese precedent. I understand the concerns about community banks. I do think that’s not a reason that should control our policy, and they certainly can change their pricing policy. So let me make some suggestions. Brian, will someone take notes? Then we can come back. In order to be conservative and avoid risk, I would like to propose alternative B. In the first paragraph, I would take Governor Warsh’s suggestion and say “target range for the federal funds rate between 0 and ¼ percent.”

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