Thank you, Mr. Chairman. I, too, want to thank you for putting this proposal on the table. I think it will help this discussion, and I find myself agreeing with everything you recommended actually. I’m a little frustrated. I can’t find anything to disagree with. [Laughter] But let me mention a few nuances. On the question of whether it is helpful to do this in the absence of a quantitative inflation objective, I think that on balance it is. It does move the ball forward. In line with Bill Poole’s question earlier, it’s an incremental step, but a very significant incremental step forward and one that on balance will help provide more information. If at some point in the future the Committee decides to have a quantitative objective, it would be an important part of that process. In any case, you’d have to do it as well.
On the questions that Don Kohn asked us to comment on specifically, I think that, yes, we should proceed with the enhanced projections and four times a year is a good way to do it. I like the total inflation approach, looking at it on a long-term basis, because it clarifies the confusion between core and total, and over time they should clearly be the same. Regarding the write-up, my recommendation is to put it as an appendix to the minutes to keep it as simple as possible. I think that putting it as an appendix simplifies it because then you can just lift it out and use it those two times a year for the Monetary Policy Report, and it just eliminates any possibility of confusion between the two. If the timing of your testimony before the Congress is such that you need an expedited process for that appendix, it’s easier to do it that way. It just simplifies it for everyone, and there’s just less risk of confusion. I think it would be easier for the staff as well.
I like the idea of the three to five years, by the way, for the longer term. That is helpful in terms of explaining this to the public. I know some people are concerned that it raises questions about what potential output is and so on, but you’re giving a range, and I think it helps just to explain the complexity of this. Having the longer-term period would be helpful as well.
Getting back to Vince’s specific questions here—should we share them? Yes. I like the way you’ve used the fed funds rate path, and I like the uncertainty and risk. About finalizing projections, I agree completely with what Don said. The information should be what we have in hand at the time of the meeting because we all should have the same cutoff point for the projection, and that’s the logical cutoff point, and then maybe give people a day or two to update them or modify them based on what they heard at the meeting. But it should be a very clear cutoff—the day of the meeting.
About expediting the minutes, I guess I would have one disagreement here. I disagree with Don on this. The benefits of expediting them would be very minor compared with the potential costs in terms of additional staff resources that would be needed. I think we have it just about right now. Again, if you shorten the schedule, you can’t lengthen it again. So I would just keep it where it is now.
I just mention one other little aspect, and that relates to the histograms. I agree we should use them—they will show the outliers in the projection, which is fine. Again, using them shows the diversity of views. There is a risk here that some of the outliers may over time want to move more to the center, but so be it. I don’t think that is a great risk, but I think it is something we should recognize might occur here. So on balance, I think the proposal you have put forth is very, very good, and I agree completely with it.