Based only on my reading of the Greenbook and the options presented in the Bluebook, I would have supported an easing today. I am persuaded, however, by the timing question to support your recommendation. I would just like to add one point about executive sentiment, building on comments made by the Chairman, Vice Chairman McDonough, and Governor Bies. The markets still reward executives who outperform their peers. If we look back at the 1991-92 environment, when a significant amount of downsizing was going on, once that downsizing had been complete there were only two options available to achieve growth—to expand by merger or to expand by additional investment. It seems to me that this time we have seen a great deal of improvement in the efficiency and timing of investment decisions, to say nothing of the decisions themselves in terms of what investments to make. But the margin of error in the timing is even tighter than it was in 1991-92. So coming back to Vice Chairman McDonough’s comment about the psychology, once the psychology seems right for businesses to make new investments, I think the pickup in investment could be quite rapid. In my view to do anything at this point to disturb that would be wrong.
With respect to the statement, eighteen months ago when I first joined the Committee I thought it would be pretty easy to improve the statements that we were making. It didn’t take me long to realize that every change we made was parsed carefully, so by my second meeting I was very conscious of the desirability of not changing any more words than necessary. However, as in the business world, there are windows of opportunity. Having not opined a risk assessment at the last meeting gives us an opportunity this time to make some changes, and these changes seem to me to be appropriate. So I support not only the statement but also the manner in which we’ve altered the statement.