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

Given that the avalanche hasn’t really moved our assessment very much, I certainly don’t see any reason to move interest rates now. I think it is important to acknowledge in section 2 some of the slowing that we’ve seen. As we have discussed, there are two ways to do that. One is to include the substantial cooling of housing. I think there’s consensus for that—I haven’t heard anything said to the contrary—and I think it’s important that we do have that. Then the question is whether we want to go further and whether we can do that clearly, rather than cause confusion. Obviously, the simple option is just to cut it all out—take the Minehan approach and say “substantial” is sufficient. As Governor Warsh mentioned, we’ve been thinking about a simplified version of alternative B that mentions just some “recent indicators.” Then we can get out of the discussion of production, spending, and the specifics. But I do think that’s better than saying “growth.” It’s also better to talk about some of the indicators rather than just the overall growth number, which was in exhibit 4. So I think exhibit 5 is better that way. Then it’s a nuance whether we want to include “somewhat subdued,” “slightly weaker,” or “mixed,” and whether we use “were,” “have been,” or “are.” I’m not quite sure exactly where I stand on all of those, but I do think that simplifying the language to some degree and just saying something about indicators would be the way to go.

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