Thank you, Mr. Chairman. I, like President Moskow, find it very difficult to find any disagreement with what you propose. I’m very supportive of the approach you’ve laid out for the reasons that you articulated so clearly. I support extending the forecast period. You mentioned going to a third year; you also suggested maybe a three- to-five-year average. I’m leaning toward the three-to-five-year average because I had proposed a five-year extension of the forecast period—the two years that we currently use and then adding the fifth year. But your three-to-five-year average makes perfect sense to me.
I’m very supportive of using a total inflation number. President Hoenig mentioned that he had a preference for the total CPI and so do I for the reasons that you mentioned: It’s a measure that the public currently understands, and it gets a lot of publicity. But as you point out, if we start using the PCE deflator, the public will start to focus on that measure. I like the approach of having quarterly releases of our projections. That seems appropriate. Last year we saw that when we release our forecasts only twice a year, they can become outdated rather quickly. So giving more information on a quarterly basis would allow us to keep our forecasts more current. I would like us to spend more time talking about whether we assume an optimal policy because, as Governor Kohn pointed out, we’re going to get pressure to release our fed funds rate path because people are going to want more clarification of what we mean by “appropriate” monetary policy or “optimal” monetary policy. Finally, I like the fact that your approach retains the current structure of the Federal Reserve System and allows us to give our own forecasts, letting the public see the diversity of opinion around that forecast. We are going to have to discuss when it will be appropriate for us to talk about our individual forecasts because, once we start to give the public more information about the Committee’s views on certain things, the public will want to find out where the differences are. Then we will have to have some agreement about whether it’s appropriate to talk individually about how we see our differences from the Committee. But these are details that we can talk about with more time. In general, I’m very supportive of the approach that you’ve laid out today.
I know we’ve been asked to answer some of Vincent’s questions and respond to some proposals that Governor Kohn put out, and I’ll just make a few comments. I do want to proceed with the projection. I mentioned that quarterly would be fine. Regarding when the projections should be finalized, I support doing it at the end of the week and using the same rules that we use for the minutes currently—not to bring in new data that we receive. In terms of the benefits and costs of further expediting the minutes, I think, like President Moskow, that the benefits are minor compared with some of the costs. The current process is giving more time for members to give thoughtful input into those minutes, and I wouldn’t want to change that. Those items complete my comments. Thank you, Mr. Chairman.