kakeith406/op-fed huggingface dataset:
Prior discussion:
speaker: MR. POOLE.
text: That's a consequence, and if we're not willing to accept that consequence, then we're not going to be able to carry through on a policy that's oriented toward forcing liquidity into the system and targeting some quantities. That's where I come out. I believe it's very important before we get too deeply into the institutional detail to start with the very simple proposition that we can't fix both the price and the quantity. At some point we may have to choose. 
speaker: CHAIRMAN GREENSPAN.
text: President Stern. 

MR. STERN. "If I ask myself why I might be concerned about deflation, exhibit 1 is one answer--the Depression."

Full utterance: Thank you, Mr. Chairman. I came out pretty much where you did with regard to the four questions--so I'll attenuate my remarks--but let me briefly explain why. We're having this conversation, at least from my perspective, because of our concerns about the possibility of deflation. If I ask myself why I might be concerned about deflation, exhibit 1 is one answer--the Depression. While there may not be a consensus as to the causes of the Great Depression, people usually cite a crisis in banking, inappropriate monetary policy, wage stickiness and collusion in the labor market, and maybe the Smoot-Hawley Act. None of those conditions seems to be particularly prevalent or relevant today in my judgment. Another answer, exhibit 2, is Japan. There again people cite serious problems in the banking industry, stop-and-go policies, and serious resource misallocations having to do with trying to preserve dying or uncompetitive industries, and so forth. Again, as in the case of our own Depression, those conditions seem to be largely absent in our economy today. The third possible reason I come up with for our concern today has to do with disappointment about the rate of growth in the economy. Depending on what time period one selects, the economy has been growing at 11/2 to 21/2 or 3 percent over the last group of quarters. My suspicion is that, if it were growing at 4 or 5 percent or more, we wouldn't be very concerned--even with price indexes going up at a rate of 1 percent or so, plus or minus--about the possibility of deflation. If that judgment is right, then what we're really concerned about is the pace of economic growth. So what it seems we should be involved in, at least for the moment, is a fairly traditional exercise of economic stimulus in an effort to further boost aggregate demand. That suggests to me that for now our primary focus should be on our incremental policy changes, if any.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MR. POOLE.
text: I would argue against that on the ground that it will raise a lot of questions about what that means in these circumstances. I'd leave it alone. 
speaker: CHAIRMAN GREENSPAN.
text: Yes, I think it's a word of art in this type of statement. We've used it before; and in the context of what we've done, it becomes clear. 
speaker: MR. MCTEER.
text: I always thought we used "sustainable" to mean low enough, and we're talking here about growth not being high enough. 

CHAIRMAN GREENSPAN. "But for the purposes of this statement, we're saying that all of the signs plus the additional stimulus would suggest a significant acceleration in economic activity."

Full utterance: No, "sustainable" means any rate of growth for which the internal dynamic of that growth has the capability of continuing. Now, there are disagreements as to where that rate is. But for the purposes of this statement, we're saying that all of the signs plus the additional stimulus would suggest a significant acceleration in economic activity. At the moment, however, we'd be hard pressed to argue that the data we have seen thus far could be characterized as self-perpetuating.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. MOSKOW.
text: The TIPS spread was mentioned in the staff briefing yesterday, and in your comments today you said that for the period over the next five years there has been a bit of up-and-down movement but that the five-to-ten-year period has shown a quite dramatic increase in inflation expectations. In the staff briefing yesterday part of the explanation was the increased liquidity in the market. But it was clearly noted that that was not the only reason. I was wondering if you could talk about some of the other reasons for the increase in the TIPS spread--which is really inflation compensation--in that five-to-ten-year period. Is this a warning sign for us that a significant number of people in the financial markets are concerned that we're losing control over inflation? 

MR. STOCKTON. "Brian also mentioned hedging demands, but we think that was probably a relatively short-lived effect."

Full utterance: I mentioned the five-year inflation expectations, in part, because we don't think the five-to-ten-year inflation expectations are conditioning current wage and price setting decisions. I don't think anybody is setting a wage contract over the next year or two or three based on five-to-ten-year inflation expectations. But those expectations obviously would matter for the real rate on longer-term securities. I think Brian Sack, our briefer yesterday, mentioned that there is a liquidity story but that there is also a possibility that market participants have shifted their views as to your longer-term inflation objective. It seems a bit far-fetched that so big a change in expectations could have occurred over such a short period of time. So we're somewhat skeptical about that. Brian also mentioned hedging demands, but we think that was probably a relatively short-lived effect. I don't know whether Brian Madigan or Vincent wants to say any more about that.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MS. GOLDBERG.
text: I tend to go with the longer history in part because, after we've had a strong dollar period, foreign producers have been able to be quite profitable and build up their margins. That also gives them scope for accepting lower margins for a while, but that's a finite process. One interpretation is that, in 2002 or early 2003, foreign producers were living off the fat of a strong dollar period, and maybe that's not a long-run relationship to be locked in. Also if you think of the Asian countries, China's prices haven't been changing against the dollar because their currency is pegged to the dollar, so China's competitors might have been more constrained in moving their prices. Whether or not that is something that can persist is debatable. 

MR. GAGNON. "To our mind, that may explain why the pass-through seems to be higher lately."

Full utterance: I think we agree on what we've seen in the past and, of course, we both are wondering what will happen in the future. I'd just like to say that I believe a lot of the differences in our views come from how we think about commodities. That's an issue to consider going forward. We both looked at import prices, disaggregated and aggregated. When we look at aggregated import prices, we tend to put commodity prices separately in our regression in addition to exchange rates. We, too, find that there was less pass-through in the 1990s. The question is, What is the story lately? I think that's where we may have some difference. In the past few months we've been saying that more of the rise in prices has occurred because commodity prices are rising, which we think has some exchange rate component but also has a large cyclical component--domestic demands in China or, more broadly, a world demand component. To our mind, that may explain why the pass-through seems to be higher lately. Time will tell which will turn out to be right. Frankly, I have a lot of sympathy with perhaps a return to a higher pass-through in the future because I think, as Linda said, the lower pass-through in the '90s might have been because it was a time when China's economic growth was rising and their currency was pegged to the dollar. Even though a lot of countries in Asia had exchange rate movements up and down in the '90s, for those who compete with and integrate their production processes with the Chinese, there was an 800-pound gorilla that they couldn't really compete against. So they were forced to price along with China, and China's currency was tied to the dollar and thus our pass-through estimates would fall. When we've looked bilaterally at which countries seemed to have passed through less in the 1990s, it was Japan, developing Asia, and Mexico. So it's quite possible that, if China were to revalue or think of a change in that respect, all bets could be off. Maybe we'd go back to the historical pass-through. The jury is out on that.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. FERGUSON.
text: The other question I have deals with chart 3, on housing prices. My question is about the footnote, which says that the rent-price ratio is adjusted for biases in the trends of both rents and prices. Is that where you pick up demographics and lifecycle factors? What are these biases in the trends, and how does one think about changing demographics and the relative attractiveness of owning a home versus renting? Give me some sense of whether or not the shape of the curve that you show here is likely to reverse, as you imply, or likely to stay relatively low. 

MR. OLINER. "But even after you account for the fundamentals, there's a part of the increase that is hard to explain."

Full utterance: The biases referred to in that footnote were really technical biases in the construction of the two measures shown here, the rent measure and the price measure. Had we not adjusted for them, the rent-to-price ratio would have been much lower at the end point. So it would have looked more alarming. In part we think the published data have some technical problems that need to be taken care of before this analysis can be done in a way that is meaningful. With regard to the question of owning versus renting, it depends to some extent on what is happening to interest rates because that changes that calculation at the margin. So it's really important to plot any kind of valuation measure relative to an opportunity cost. Just showing the rent-to-price ratio I think would have been somewhat misleading; it's really that gap that we think is the meaningful measure of valuation. And it looks somewhat rich, taking account of the fact that interest rates are relatively low and income growth has been relatively strong. I don't want to leave the impression that we think there's a huge housing bubble. We believe a lot of the rise in house prices is rooted in fundamentals. But even after you account for the fundamentals, there's a part of the increase that is hard to explain.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MS. JOHNSON.
text: But that's terribly complicated, more by politics, property rights, infrastructure, and those kinds of issues than by anything inherent in this imbalance problem. 
speaker: MS. MINEHAN.
text: We've raised an issue of very outsized numbers and the potential for financial instability. But there seems little we can do here in this country on the monetary policy side--possibly a lot we could do on the fiscal policy side but not on the monetary policy side. 
speaker: MS. JOHNSON.
text: The essential monetary policy contribution, it seems to me, is to keep U.S. inflation low and U.S. output as close to potential at a sustainable rate as possible. This is what you would do in any event. 

CHAIRMAN GREENSPAN. "I don't recall that the G-5 said anything of great significance."

Full utterance: Not quite. Now, if I believed in the efficacy of intervention, which I do not, it would not surprise me to be sitting here and observing the sequence of events that Dino has described this morning. Dino is talking about reductions in volatility and related increases in stability. We're looking at an extraordinarily stable system in which there is a benign response to 75 basis points--or will be. [Laughter] Well, I'm not prone to avoid making forecasts! The question that I think arises is whether, on the basis of history as Karen points out, we can get through these periods without crises, as a developing literature around the world suggests. If there were a way in which we could move the dollar's exchange rate down significantly in a manner that had no secondary effects, would we not want to accomplish that? Would we prefer the euro-dollar relationship at this stage to be at 145 instead of 122? The answer is, "Yes, we would." But we don't know how to get there. The general presumption might be that we can get there through intervention, but the experience with interventions suggests otherwise. There are some people here who were at the Fed during the Plaza Accord period. I was not, but I was watching from the outside, and I don't recall a lot of intervention. My recollection was that in February 1985 the dollar and the pound sterling were almost at parity at one point. The situation was like an avalanche waiting to break; and when the G-5 met and released a few statements, the avalanche did break. There wasn't a great deal of intervention, but it appeared to be extraordinarily successful. That struck me in retrospect as sheer luck. I don't recall that the G-5 said anything of great significance. We have a degree of credibility in the Federal Reserve, but I'm not at all certain that if, for example, the Secretary of the Treasury and a number of us started talking in that direction, we would knock the dollar-euro exchange rate down sharply. I hesitate to think of the consequences. If it were easy to do, I would recommend it. The problem here is that there is a wide consensus that this is the time we want the devaluation of the dollar to happen, not later when the economy may be in a weakened structural situation.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MS. PIANALTO.
text: If we stop short in adjusting the fed funds rate now, we could find ourselves losing the ability to continue with the moderate steps that we've had the luxury of implementing so far. Over the past few months, many of us have noted that what we ultimately want is to move the fed funds rate somewhere back to a neutral neighborhood. Given the imprecision of this neutral concept, it's a pretty big neighborhood, and I'd prefer not to be at the lower end of that range. Thank you, Mr. Chairman. 
speaker: CHAIRMAN GREENSPAN.
text: President Stern. 

MR. STERN. "In talking to employers, the general impression I get is that they are finding labor availability to be ample, although occasionally they've expressed some concern about the shortage of particular skills."


Opinion: yes
Prior discussion:
speaker: MR. GUYNN.
text: Therefore, I believe that continuing on our recent policy path for the next few meetings would be the best course of action. Thank you, Mr. Chairman. 
speaker: CHAIRMAN GREENSPAN.
text: Let's take a break for coffee. But owing to what must have been a record question period after the chart show, we're running a little behind schedule, so let's return quickly. 
speaker: CHAIRMAN GREENSPAN.
text: President Hoenig. 

MR. HOENIG. "And the demand is incredible."


Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): entailment
Prior discussion:
speaker: MR. POOLE.
text: What do we know about petroleum inventories, both crude and refined products, around the world? The Greenbook, Part 2, has the U.S. data, but what do we know about elsewhere in the world? 
speaker: MS. JOHNSON.
text: I just cannot resist the temptation to make a brief response to your comment, and then I will answer your question. [Laughter] 
speaker: MR. POOLE.
text: Which is fine. 

MS. JOHNSON. "So it is certainly true that the capital flows might be exogenous."

Full utterance: You know, one can approach a general equilibrium process in any number of ways, and finding things that are truly exogenous to that process is very, very difficult. So it is certainly true that the capital flows might be exogenous. However, my guess is they are responding to endogenous economic activity in the United States and the way we are behaving. Trade is certainly endogenous. Saving and investment behavior has some exogenous characteristics and some endogenous characteristics. I take your point, but it is still nonetheless true that, even if the rest of the world wants to invest in the United States, if we saved more, we would not have to borrow just because they wished to lend. And our saving more would have an implication for asset prices and exchange rates and incomes that would lead to a generally improved outcome that would, over time, have a different characteristic than the one that we have observed. So no one exogenous thing is driving everything else, and that statement is as true for the capital flow part of the story as it would be to say that the current account is the driver and everything else is in response.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. KOS.
text: Whether that's a matter of days or weeks or maybe longer, it's hard to put a time dimension on it. I was trying to make the point in my remarks, especially about natural gas, that most people just assume that last week's price movements in natural gas--I believe a very sharp drop occurred on Thursday--were related to the closeout of some of these positions from the one hedge fund, and the presumption is that other hedge funds that made money in energy earlier this year were also getting out of some of these trades. So that would support what you were saying. Now, whether that element has an effect on prices for a week or two weeks is very hard to know, but it probably does have some effect. I think Karen is probably right in the sense that over the long term there are inventory effects, and at some point, those speculative effects get washed out. 

MR. FISHER. "Well, again, it's just something I'm interested in."

Full utterance: Well, again, it's just something I'm interested in. It's not unimportant, but I have a more important question. Karen, I noticed last week that the International Monetary Fund forecasts global economic growth, non-U.S. growth, of around 5 percent. Our number is 31/4 percent. What is the difference between us? If we're underestimating, what would be the policy implications?

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. STOCKTON.
text: There is not a lot of predictive content that way. 
speaker: MR. PLOSSER.
text: Yes. That's really my point. 
speaker: MR. STOCKTON.
text: Therefore, in some sense, to be consistent with the forecast, we would have to continue to expect that consumers are going to be worried and more downbeat. Again, while I would say that's obviously a significant source of uncertainty, I don't think that's necessarily unreasonable in an environment where there will continue to be a lot of bad news and where the bad news is compounded with a weakening labor market and some things that could lead to some extra-model type of restraint. 

MR. PLOSSER. "At the same time, I say to myself, "Well, you know, now it is about at the level that the Board has been forecasting all along.""


Opinion: no
Prior discussion:
speaker: MR. PLOSSER.
text: Fourth and finally, like everyone else, I am very concerned about the developments in the financial markets. I've been supportive of the steps we've taken to enhance liquidity in the markets through the TAF, the TSLF, the PDCF, or whatever. 
speaker: CHAIRMAN BERNANKE.
text: AEIOU. 
speaker: VICE CHAIRMAN GEITHNER.
text: Don't say IOU. [Laughter] 

MR. PLOSSER. "Uncertainty about valuations seems to be the root cause of liquidity problems."

Full utterance: Well, I've been supportive of those, and I want to compliment the New York Desk and the people who have worked on this because I think they are very innovative. I'm not clear how successful these instruments will be, and they are not without their own set of risks of creating some potentially dangerous expectations regarding future Fed behavior, which eventually we must deal with. But I think they are worth trying as long as they are removed in due course. I can also support a further narrowing of the spread between the funds rate and the primary credit rate, although I would eventually like to see a review of what we think that spread ought to be in more normal times and what our exit strategy might be like as we move toward that. Giving some thought down the road to that I think would be helpful. So while I believe that we have appropriately reduced the funds rate in response to the worsening economic outlook for the real economy, I am less convinced that reducing the funds rate further will do much to stem the liquidity problems in the market or to lower risk premiums. Uncertainty about valuations seems to be the root cause of liquidity problems. The price discovery process needs to continue, and it may take a while. In this case, I think the Fed needs to continue to do its job to reassure markets that it will act as an appropriate lender of last resort, but we must be careful that a lower funds rate, if that is the path we take, doesn't become just a form of forbearance that contributes to delaying the necessary writedowns and the price discovery process itself. Yes, the financial markets can have spillovers to the real economy to which the Fed needs to react with monetary policy, and I believe we have. At the same time, we need to keep focused on both parts of our mandate. We put our credibility at risk if we do not do so, and this would be a cause for severe problems later when we may need to act to regain it. We will have to face the fact at some point that we will disappoint the markets with their ever-increasing forecast of a lower funds rate. Thank you, Mr. Chairman.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. KROSZNER.
text: For sure, but just thinking about whether there are other things that we could do related to stigma might be worthwhile in this context. 
speaker: MR. MADIGAN.
text: Absolutely, we agree. Of course, when the Board adopted the primary credit program in 2003, we gave a lot of thought before that and did considerable work after that to try to minimize the amount of stigma by trying to make very clear to banks that in our view use of the window didn't entail stigma. But the fundamental problem still is that banks are concerned that their use of the window may be detected in the market one way or another, especially in a period of financial stress, and that is just not a cost worth incurring. 
speaker: CHAIRMAN BERNANKE.
text: President Plosser, did you have a question? 

MR. PLOSSER. "I just wondered if there are differences in their approaches as to how often they interact in the marketplace."


Opinion: no