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

Thank you, Mr. Chairman. I have just a few points, building on what you said a few minutes ago. Just to clarify on the federal funds rate path: There was a consensus on the Committee not to publish the fed funds rate path, so we are collecting that just to understand what people’s policy assumptions are and how they fit into the forecast. There was a question of whether we should assume appropriate policy or, as the Chairman had suggested, whether we should assume what you think the Committee would do rather than what it should do. I think we just need to think about what happened. We’ll have another dry run in June. I think I would collect those assumptions again in June. But when we go live, once we decide how to focus this policy, we might or might not collect the fed funds rate assumptions. The problem with going live and collecting the assumptions is that in five years they will be part of the public record. But as long as we’re doing dry runs, that’s not the presumption. We’ll find out something about how the Committee thinks, and the Committee can discuss how it wants to characterize its assumptions.

We can discuss our experience with this dry run now. However, within the next couple of days we will ask the staff to survey the Committee about your reactions to how this went, how it could be improved, what aspects were most and least helpful, whether there are ways to use this even more than we did in our policy discussion, and if there are things—now that you’ve been through it once—that you’d like to see from the staff that you didn’t get. What about the issue of circulating our individual submissions? Should the staff extract key issues from those submissions and circulate a list of key issues ahead of time? There are lots of things on which we need to get your views before we formulate the June dry run. So you will have an opportunity to make those comments in a formal way.

As the Chairman said, in June we will go on to some of the other communication aspects that we haven’t discussed before, such as the timing of the minutes, which will interact with this minutes-like description that we’re doing of the projections, and when the description needs to be published in time for the Chairman’s testimony in July and February. There’s a possibility of moving that up. Then how will all of this interact with the statement, with the announcement? If we go ahead with this forecast process, we’ll need to make sure that the statement conforms to it. Regarding the statement, there are lots of questions, as the Chairman was saying, about the balance of risks and how we characterize things. So I think we need to have a discussion of that in June, and it will be on the table in June.

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