Prior discussion:
speaker: MR. PLOSSER.
text: At the same time, I do not perceive an immediate threat to the unanchoring of expectations, so I can accept keeping the funds rate at an unchanged level at this meeting. But at some point, before the unemployment rate begins to improve substantially, I believe this Committee will need to raise rates in order to deliver on our inflation objectives. Regarding language, I can live with the language in alternative B. Thank you, Mr. Chairman. 
speaker: CHAIRMAN BERNANKE.
text: Thank you. President Stern. 

MR. STERN. "As far as language is concerned with regard to B, I would be inclined to give more prominence to financial issues."

Full utterance: Thank you, Mr. Chairman. Well, even before the events of the last several days, I thought that this was the most severe financial crisis, certainly, that I have seen in my career. And the last several days--as well as some of Bill's comments about possible contagion spreading from breaking the buck and so on and so forth--have only heightened that conviction and my concern about where we are. So I think it is fair to say that the headwinds confronting the economy have intensified even further. It is difficult to comment on the degree or the duration, but I think we know the direction. As far as the near-term economic outlook is concerned, I wasn't terribly optimistic about the next two or three quarters to begin with. If I were going to prepare a new forecast at this point--or even had I prepared one last week--I probably would mark it down a bit. But, of course, there is not much we can do about that at this stage. As far as the inflation outlook is concerned, I have thought that, late in this year and into next year, inflation would start to abate, and recent developments perhaps heighten my conviction about that. But I will agree that it is still an open issue. So it seems to me that all of this suggests that the outlook, at least in terms of financial conditions and the economy in the near term, has clearly deteriorated. The inflation outlook, if anything, has perhaps improved a notch, or at least the outlook that I had earlier is a little more solid. Given the lags in policy, it doesn't seem that there is a heck of a lot we can do about current circumstances, and we have already tried to address the financial turmoil. So I would favor alternative B as a policy matter. As far as language is concerned with regard to B, I would be inclined to give more prominence to financial issues. I think you could do that maybe by reversing the first two sentences in paragraph 2. You would have to change the transitions, of course. I would say that if we wanted to change policy at this meeting--and that is not my preference--I would do it by 1/2 percentage point, and I would think that the rationale would be psychological reasons. Again, I don't think we are going to have a big effect on the near-term performance of the economy. But if we think psychology in the marketplace is sufficiently bad or that there is sufficient concern that the Federal Reserve somehow doesn't quite get it--I would think that all our actions cumulatively, including the actions over the weekend, should not make that a grave concern--then I think we would want to do more than 1/4 percentage point. Thank you.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction