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

I think we’re in a fairly good place in terms of the policy and the signal. The language in March and in alternative B today preserves a nice balance between the need to signal concern that we may not get as much moderation in inflation as we’d like and acknowledgement of some of the dispersion of views around the Committee on what our ultimate objective should be, what our preferences are, and over what period we’d like to see inflation come down to whatever level. It also gives us more flexibility. I would not want to jeopardize that balance today. I don’t see any compelling need to alter market expectations today, and as I said, I am quite comfortable with alternative B.

Just on the latter, deeper conversation about where we’re going in June—things will change between now and June. June will be interesting, I suspect, even if it unfolds in the way the forecast implies. But ultimately our judgment is about whether we have an acceptable forecast for inflation. It’s whether the path going forward is acceptable to us in some sense, and that’s what our discussion should be about. Of course, you can’t separate that from where inflation is today because that’s where you’re starting. But as Rick and many others have consistently reminded us, the language is about the forward-looking effects of policy today, or as they are built into market expectations, or as we assume today for the expected path of inflation going forward. But I like B and would be averse to changing it.

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