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

Thank you. I strongly support your proposal for a 75 basis point funds rate cut today, and I like the proposed wording of the statement. The outlook has deteriorated, not only since December but since our conference call. The downside risks have clearly increased. I think the risk of a severe recession and credit crisis is unacceptably high, and it is being clearly priced now into not only domestic but also global markets. Even so, I put the stance, as best I can judge it, of monetary policy within the neutral range. Policy should be clearly accommodative. We also need a cushion against severe downside risks. We need strong action, and your speech has prepared the markets for actions of this sort. At this point, they are expecting at our next meeting more than 50 percent odds of a 75 basis point cut. An intermeeting move will be a surprise, but I think it will show that we get it and we recognize we have been behind the curve. I think it will be assumed with this statement and action today that we will move somewhat further as well at our next meeting. That is something we should recognize—the statement creates that expectation.

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