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

I put my name on the list because I wanted to ask a mere question, but since this other issue has come up let me give my view on that. I tend to be on the Stockton– Wilcox side on this issue. It seems to me that, for the staff forecast to be maximally useful to us, we want to know what is being assumed and how it all fits together. I have more confidence in the way the staff now does it—where they are perfectly open about their assumptions, and there is some central guidance to make sure that all of the sectors are using the same assumptions. As Dave just pointed out, if there is random information here and there about this or that, they can work it in. But at bottom they have a consistent view of what is going on. I think if we asked them to base everything on the market funds rate, they would have to get the market view of this and the market view of that, and I’m not sure how they could do that. So I’ve always had a preference for the way the staff does its forecasts now. I think, Bill, that the simulations you asked for on the market funds rate have been very helpful, but I’m actually quite content with the methodology that is presently in use.

Now, let me ask my question. In the press there is beginning to be talk of new bubbles. I’m collecting all the information the staff has on that, so let me see if I have it right. First, Larry, at the bottom right of chart 3 on house prices: If you squint at that, before the forecast domain house prices actually are falling rather sharply.

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