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

Thank you, Mr. Chairman. I support maintaining the current federal funds rate target today, and I can support the language in alternative B. I’m trying to decide between the holiday language and the original, and I’m struggling with the “weaker than anticipated.” So I agree that, if we remove it, I would be comfortable with that assessment. But I am also concerned that our current risk-assessment language is becoming stale. Back in August, when we first chose to pause, we were nervous that our next move was going to be up and that inflationary pressures could intensify. We thought it was critical to tell the public that we would be ready to resume raising the fed funds rate if our outlook required us to do so. I myself was more than half expecting that such would be the case. But the incoming data since August have not altered the Greenbook baseline projection for the next year, and so I’m less worried today than I was in August that we will have to do more on the upside on the fed funds rate. Today is not the day to remove that language or change that language. But if we believe that the path of the fed funds rate in the Greenbook is the one that is likely to evolve, we should start to prepare markets for our maintaining the current federal funds rate longer than they currently expect—because they expect us to move down. So I would rather start to craft some language that would signal to markets that we’re likely to stay at our current fed funds rate longer and, depending on how the economy unfolds, that we may eventually be more restrictive than we appear to be today. I agree that today is not the time to change our language significantly, so I support alternative B.

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