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

Thank you. I think the Vice Chairman’s description of the virtues of 50 basis points and balanced risks versus 25 and the risks tilted toward weakness is correct, and I won’t repeat that. But to me the issue is more one of a change now versus no change. And in the spirit of what Gary Stern said earlier about what one thinks one knows with some confidence, for me it is this: If I look at the sentiment surveys, the risk premiums in markets, and the inversion of the yield curve on the front end, and if I listen to the anecdotal information about uncertainties and fears—and give very little weight to the pickup of the stock market in October, though I wouldn’t dismiss that entirely—it seems clear that the natural rate has moved down. When the natural rate moves down with an unchanged intervention rate, it means that the de facto stance of policy has at the minimum become less expansionary and possibly restrictive. I don’t know which is the case here. I may not go as far as Bill Poole might on what is the desirable growth in nominal money measures, but I do believe that in this environment less stimulus or a deceleration in monetary growth, if it were to occur, would be undesirable. So I prefer going with a 50 basis point cut and a balanced risk statement.

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