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

Thank you, Mr. Chairman. In the earlier discussion on January 9, as I recall, I not only supported a move but suggested that I would support an intermeeting move if the conditions merited, and I do think they merit it. I am really in the same camp as President Geithner. I am not sure I see what is to be gained by waiting another eight or nine days. I think the psychology here is bordering on, shall we say, a spiral quality. A preemptive move like this—preemptive on two dimensions, the rate dimension and the timing dimension—has a shot at changing the overall psychology of the moment, including perhaps even creating an atmosphere in which support for the monolines, if they are having trouble raising capital, might very well be a more rational decision on the part of some investor.

I think we would appear much less panicky than we might have on January 9. We are not doing this in combination with the TAF. The TAF actually appears to have done its work pretty well, and the need for the TAF may be diminishing. Not much more data will come in the next few days, if I have my schedule correct. I think we are at a kind of juncture now where the spillover from the financial markets is not really much debatable; it is very clearly happening, with risk of a dynamic that feeds off itself. So I am very supportive of this move, and that is really my position. Thank you very much, Mr. Chairman.

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