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

Let me just respond quickly. Obviously, I am not advocating any change in our objectives. I just think that at this point we have not quite balanced the risks to our objectives appropriately, and you could think of it as a level adjustment, if you’d like, and not a change in path. I would just note the risk of having what could be a strictly inefficient outcome, in which the growth situation gets so far out ahead of us that inflation falls too much, as happened in 2003. I believe that we can make essentially a level adjustment and try to get a little ahead of the risks here. So long as the market expects the economy to slow—and I note that they are already expecting quite a bit of easing and inflation expectations aren’t moving—I think we can do that in a safe and reasonable way. I am not in any way advocating changing our objectives. I am suggesting that we are not quite calibrated properly to achieve our objectives. President Rosengren.

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