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

I have an observation and a question. Your outlook for employment is growth at just 25,000 per month. If that’s what we’re going to see, we’re going to have a major communication challenge to explain it because it is going to look and feel like a recession to almost everybody who sees those numbers. However, you don’t have a recession; you have continuing slow growth. So that’s just my observation.

I have a question about the alternative simulations and the market-based funds rate. If I understand what you do, you have your baseline forecast, and then you just impose a lower funds track, and that yields higher growth. Another way of looking at the market-based funds rate is essentially to invert the Taylor rule and say how weak economic activity would have to be for the Taylor rule to lead us to cut rates. In that case, particularly if you take a version of the Taylor rule that has a lot of interest smoothing in it, it takes a lot of downside surprises, some combination of activity and prices, to get us to reduce rates to match the market. I just want to throw out that observation and ask whether you have any response to it.

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