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

Thank you, Mr. Chairman. I don’t know how we would rationalize or explain a departure today from the pause that we decided on at our last meeting. Also, I think that what we have learned since our last meeting does not substantially alter our medium-term forecast. Therefore, I strongly favor another hold decision today, along with a statement that continues to make it very clear that, if our forecast changes, especially with regard to the expectation of moderating inflation, our policy position would also be reassessed.

I also want to echo the earlier observation of President Stern on the evidence in the memos that were circulated before the meeting. Despite the lack of correlation between resource utilization and inflation and a decline in the influence of energy prices on core inflation, we continue to put considerable weight on these relationships in our statements. I think there are issues here that deserve a good discussion at some point.

Finally, it seems clear that we are really struggling to understand inflation dynamics and see a need for a more empirically robust framework to guide our decisionmaking. I assume this area will receive even more research emphasis and will be a fundamental part of the upcoming debate you will have on how to target, forecast, and talk about inflation and the inflation outlook. Thank you, Mr. Chairman.

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