Thank you, Mr. Chairman. I am very comfortable with the policy stance—keeping the rate at 5¼ percent. I think policy is in the right place. It is moderately restrictive but not restrictive enough to cause us any problems, particularly in the housing area.
In terms of the statement itself, I am comfortable with alternative B, as written or as modified by Don Kohn. We could talk a bit more about where that word “pressure” should be when you compare it with the last statement that we had, but that is a very minor point. The key in this statement is dealing with the fact that core inflation, according to our forecast, is going to be 1.4 percent in the second quarter. It was 2.4 in the first quarter, 1.4 in the second, and then it goes back up to 2.2 and 2.2. That is really the key because, when you see inflation improving and then going back up again and juxtapose that against the longer-term forecast that we have come up with, which shows some improvement in inflation over time in ’08 and ’09, it is a delicate balance as to how we present this in the statement. I think the way alternative B has been formulated captures that. I had suggested a slightly different approach. I don’t feel strongly about this, but you could also take that first sentence in section 3, which says “readings on core inflation have improved modestly in recent months” and just add the phrase “but part of the improvement may be transitory.” But as I said, I am comfortable with either formulation here. I think it accomplishes the same objective.