Prior discussion:
speaker: MR. MULLINS.
text: And, of course, we've had very little increase in the implied forward rates in the long end of the curve; much of it is intermediate. Nonetheless, when considering when to switch from accommodative to neutral I would note that the current favorable outlook for stronger growth does provide a credible environment in which to consider such a move at a time when I think many people would suggest the risks are on the up side. I will also simply say that it's worth noting that the Administration forecast is, of course, for short rates to go up above inflation next year. Thank you. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Kelley. 

MR. KELLEY. "Interestingly enough, the way I heard it--others who were there may have heard it differently--they were almost unanimous in seeing the risks on the down side, not the up side, for whatever that's worth."

Full utterance: Well, Mr. Chairman, I'm about where I've been for some months now. I see very little evidence of an important change. My definition of that in my lexicon would be a moderate growth expectation, fits and starts, a surge perhaps here in the fourth quarter but not sustainable, with a slow acceleration--in fits and starts--over time. I think there are enough positives in the forecast to sustain that growth, not the least of which would be a continued reduction in your famous head winds. In all probability all of the positives will sustain that moderate growth path. I think we have to recognize that there exist considerable restraints in that forecast that should prevent an upside breakout, [including] fiscal restraint, the further impact of new taxes, and a saving rate that is already at the bottom of its historical range. Also, restructuring continues and defense [outlays] will continue to decrease; net exports will not be helpful and may decrease or get worse as well; and intermediate and long rates have shown some spontaneous rises. I emphasize that I come out on the positive side of this, but I do think we have to recognize that there are some pretty powerful restraints out there. I'll relate one anecdote that I would share with those who weren't there. The Federal Advisory Committee was in here a week or so ago and they were asked what their forecast for the economy was. They had a very, very strong consensus at between 2-1/2 and 3 percent centering on about 2.8 percent. Just to see what it might elicit, we said: Okay if that's the consensus, think contrarian a little bit and tell us where you would see the risks to that forecast. Interestingly enough, the way I heard it--others who were there may have heard it differently--they were almost unanimous in seeing the risks on the down side, not the up side, for whatever that's worth. On inflation, I just don't see any pickup visible. Inflation is still falling on a year-over-year basis by almost every measure. We still have slack in the economy, although capacity utilization may have to come off of that list with this latest report. But certainly [we have slack] in labor markets and world activity generally and sentiment continues to be weak. So, I see no reason to look to a short-term move in that regard. In short: Steady as she goes.

Opinion: yes
About monetary policy: yes