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

Thank you. Sandy, I have a question about inflation related to the panel on the top right of chart 13. If we were looking at this chart in quarterly terms, we would be seeing at the end of 2003 a rate of 0.5 percent—that’s the number in the Greenbook—and then it goes up to 1.0 percent in the first quarter of this year. I know that in the Greenbook the recent softness was characterized as “likely temporary.” I just wondered if you could talk about that a bit because obviously, if it turns out to be less temporary, it would affect one’s assessment of the probability of deflation and so forth. There wasn’t much said about why it is viewed as likely to be temporary.

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