Thank you, Mr. Chairman. As I noted earlier, given the relatively subdued pace of incoming data, given the range of uncertainties that have been talked about, and given that we have already paused, I would continue to pause. I thought the exposition you gave about the point of no return was close to my own thinking, without my quantifying it in that effective fashion. There are downside risks, and I do take seriously the Greenbook’s forecast of slow growth. However, if we do continue our pause, we need to continue being fairly strong in the way we communicate. Now, I have gone back and forth about how exactly to do that. I am a bit attracted to Michael Moskow’s formulation of being essentially in the area of B+ but having the statement look like B—that’s the way I interpret it—but also having the minutes emphasize the concern that I sense around the table about inflation risks going forward.
I, too, was a bit disappointed in the market reaction partly to our statement but mostly to the minutes of last time. Perhaps the market was overly influenced by the incoming data at the time the minutes were released, but it did seem to think that we thought the risks of rising inflation had moderated considerably. I don’t think that’s a general view of the Committee. I take seriously the concerns that many have raised about our continued seeming complacency about the level of price escalation over a fairly long period—four or five years or so—unless our preference is for inflation that centers on 2 or 2½ percent rather than on 1½ percent. Personally, I don’t see anything wrong with 2 or 2½, and I do not know whether we have any compelling data that suggest that a lower range is obviously preferable. I remember the days in which we had inflation at a little above 1 percent, and we were really concerned about deflation. So I think a lot of ins and outs and ups and downs here are getting kind of confused.
In that regard, I never thought I would be looking forward to yet another discussion of inflation targeting. [Laughter] I think that the tension between the comments of many people regarding a comfort zone of 1 to 2 percent and the expected slow moderation of inflation that is implicitly embedded in our public comments and in our public forecasts over the next couple of years is becoming more evident to market analysts along the lines of what several people have mentioned. There probably is a need for more clarity here, and so I guess I am looking forward to it. [Laughter]