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

Mr. Chairman, I agree with Governor Kohn. I am in favor of alternative B, of holding the rate where it is. The point that he just made may cover a suggestion I had because I was thinking about what I heard yesterday at the table. I heard two things. One, in our discussion of inflation, I heard some concern about core inflation qua core inflation. I was going to suggest that the first sentence be modified slightly to say that “readings on core inflation have improved modestly in recent months, but measures of overall inflation have remained stubbornly high.” Then, I would strike “however” and just say “a sustained moderation in inflation pressures has yet to be convincingly demonstrated.” I believe that is what I heard yesterday. The other music to my ears, but I think it also reflects reality—and I hear it more at the table—would be amending slightly the last sentence in that section 3 to read, “Moreover, the high level of global and domestic resource utilization has the potential to sustain inflation pressures.” [Laughter] That is what we said. That is what we discussed. We acknowledge that. I think it would show that we’re tuned in to what’s going on, and that would be my recommendation. Otherwise, I would leave the rest of alternative B unchanged. Thank you, Mr. Chairman.

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