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

Thank you, Mr. Chairman. I think that this is a tough call. I support alternative B, with the statement wording as presented. In my thinking, a 25 basis point cut today is part of a total 75 basis point action, including the October 8 move. I believe the deterioration we have seen in September and October and the resulting downward revision of the outlook merit a cumulative response of this magnitude. That said, I am sympathetic to the view that we would be well advised to keep some powder dry to respond to shocks or developments ahead. I anticipate that, because a number of the dynamics in the markets have not really played out, we will have more shocks and they could come from further financial institution failures, corporate failures, a sovereign debt crisis, and market disarray; and in other markets, such as the municipal market, there is always a chance of a geopolitical event. In all likelihood these things come in combination or in rapid fire. So, as I said, I am sympathetic to the “powder dry” view, but I see the powder dry objective as being in conflict with responding to the recent deterioration. Therefore I come to 25 basis points or alternative B to some extent as a compromise, combined with the 50 basis points of October 8. Thank you, Mr. Chairman.

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