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

Well, again, I am probably the most bearish in terms of a short-term forecast on GDP growth and have very asymmetric confidence bands, which take into account even slower growth than that. Having listened to the conversation at the table and keying off the word “hawkish” that Vince used, I want to be owlish on growth in terms of listening to President Stern’s admonition, and I don’t want to be a pigeon on inflation—just to kill the aviary context here. [Laughter] So I would advocate alternative B. I don’t believe that we should change the rate. I like very much the suggestion that President Stern just made about inflation.

The only thing in your summary list, Mr. Chairman, that I did not hear and that I think is an issue is the behavioral pattern of private-sector leaders who were trying to figure out how to preserve their margins; therefore, I think we will have more sustained price “instincts” than I would otherwise see from the current data. I think the second sentence in alternative C captures that uncertainty, and I agree with President Stern. Finally, as always, I would suggest that we add the word “global” before “resource utilization.” Thank you, Mr. Chairman.

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