Thank you, Mr. Chairman. Many of my thoughts have already been stated by others, so I think I can be relatively brief. I appreciate the approach that you are taking. I am inclined to be more proactive and would even support an intermeeting move if I felt that the market were better prepared. I supported—actually, I argued for—a 50 basis point cut on December 11, and the prevailing view at that time was that 50 basis points plus the TAF would spook the market. As I recall, in your summary you said something to the effect that, if it were 0 or 50, you would probably go with 50 but, since we had the option of 25 plus the TAF, you supported that approach. I saw greater risks to the downside in December, and I still do. But like President Stern—I think President Plosser said essentially the same thing—I’d prefer that we preserve the appearance of being a bit more orderly. So I have some misgivings if we go forward with a 50 basis point cut today, and my concerns really relate principally to tactics.
In my conversations with people over the holidays, I sensed a great deal of angst. I think I mentioned this to you in New Orleans the other day. They worry that there is no one in charge, and therefore I think the appearance of this move today would conceivably put our credibility at risk. You can argue that point perhaps either way. If we were to move today and it worked well, then it would preserve and enhance credibility. But let me just say that I am concerned that the sequence of actions from December through a possible move today would appear to be panicky and a bit incoherent. I think in many respects that is what President Stern said.
So to summarize, I am very likely to support a 50 basis point rate move later in January or even intermeeting in a week or so after more preparation of the market. I think it’s important that we husband our credibility at this time, and obviously I agree that we have to watch inflation and indications of changing expectations very carefully. I am not unconcerned with that, but I see the risks as greater to the downside. Thank you, Mr. Chairman.