kakeith406/op-fed huggingface dataset:
Prior discussion:
speaker: MR. TRUMAN.
text: As Mike was saying, there is a certain circularity in that construction. The historical series gives you an actual centered forecast. 
speaker: MR. PRELL.
text: If you look at the survey-based expectations for the foreseeable future or at Hoey's last survey, for example, he's looking at 4-1/2 percent or something like that for 10 years. And that would not be grossly out of line with what is built into these numbers for the United States. 
speaker: MR. JOHNSON.
text: But I think you could argue that inflation expectations in those other industrial countries have gone up significantly. 

MR. TRUMAN. "As I said, we are assuming that inflation will be lower."

Full utterance: Well, that's a possibility. As I said, we are assuming that inflation will be lower. Now, if you add another percentage point to foreign inflation relative to our forecast and keep oil unchanged, then that differential is going to drop from 150 basis points to 50 basis points. [Unintelligible] absolutely. And there may be an expectational element built into that.

Opinion: no
Prior discussion:
speaker: MR. ANGELL.
text: Thank you. 
speaker: CHAIRMAN GREENSPAN.
text: President Stern. 
speaker: MR. STERN.
text: Mike, I'm not sure I understand your personal income forecast. If I look at the middle panel of Chart 10, your numbers for '90 and '91 are comparable with '80, '81, and '82. But at best it looks like it stays on the weak side even given your modest growth path. 

MR. PRELL. "We have some productivity increase and we think this is internally consistent."

Full utterance: Well, we looked at that and asked ourselves the same question and, obviously, we ended up with these numbers after all of that. There is a marked slowing of employment growth in this forecast; we have increases in employment in payrolls of about 1-1/4 percent in the two years. We have another negative effect on real disposable income coming through the terms of trade effect as the price of imported goods rises relatively rapidly. That tends to create some wedge between product prices and consumer prices. It's a small thing, but it's tending to work in that direction. This is an economy in which we have very slow growth. We have some productivity increase and we think this is internally consistent. But it is a very low growth and it raises some questions, I think, about how this kind of situation will be perceived by consumers. We have not assumed that there will be any extraordinary change in their behavior, despite this prolonged period of slow growth. One needs to keep in mind throughout this, as we look at the future, that to the extent the population is growing more slowly we're going to get [unintelligible] too.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: CHAIRMAN GREENSPAN.
text: Would anyone like to offer an amendment for other than 3 to 7 percent on M3? 
speaker: MR. JOHNSON.
text: Since I was the first one to say that even though I supported alternative II on M2 I thought the range in alternative III would be appropriate for M3--given what's happening in the broader aggregates and given the staff's forecast, which is even in the lower [part] of the alternative III range--I'll make the motion that we go to alternative III for M3, 2-1/2 to 6-1/2 percent. 
speaker: MR. BLACK.
text: Second. 
speaker: CHAIRMAN GREENSPAN.
text: May I just ask a question of where the forecast would show M3 in 1991? 
speaker: MR. KOHN.
text: We have 5 percent in 1991 because we have the runoff of thrift assets slowing down as more thrifts meet their capital requirements. 

CHAIRMAN GREENSPAN. "So, in effect, there is no evidence at this particular stage that were we to move in that direction we'd have to reverse and move it back up in 1991."


Opinion: no
Prior discussion:
speaker: CHAIRMAN GREENSPAN.
text: President Boykin. 
speaker: MR. BOYKIN.
text: I would support your recommendation, Mr. Chairman. I would also hope that there is a discount rate cut. The only comment I would make is that I hope you would exercise considerable discretion in going any further in the intermeeting period unless something very unusual happens. 
speaker: CHAIRMAN GREENSPAN.
text: President Hoskins. 

MR. HOSKINS. "Don's projections presumably could err on both sides, not just one side, and we may well get a faster growth rate of money."

Full utterance: I just wanted to finish the policy statement separate from the discount rate issue. I think we ought to have asymmetric language. I'd rather have the 25 basis point move in the hands of the Chairman at his discretion. We have made some significant moves in terms of interest rates in the recent past and we haven't seen those fully show through yet. Don's projections presumably could err on both sides, not just one side, and we may well get a faster growth rate of money. But even with the projection that we have, a 50 basis point move puts us at the top of our tentative target range for next year by June. And it seems to me that some patience is needed here and some careful watching of the aggregates. I'm not averse to moving if the aggregates pan out to be more than a 26-week fluke. But maybe we ought to see what's in that aggregate box before we move ahead.

Opinion: no
Prior discussion:
speaker: MR. BLACK.
text: So we couldn't possibly tell them that this 1/4 point [reduction] was pending. And yet I think their attitude would be affected to some significant extent by that if they knew. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Mullins. 
speaker: MR. MULLINS.
text: First, I think we shouldn't schedule FOMC meetings around quarterly auctions. 
speaker: CHAIRMAN GREENSPAN.
text: Why don't the quarterly auctions schedule themselves around our meetings? 

VICE CHAIRMAN CORRIGAN. "That's not a bad idea!"

Full utterance: That's not a bad idea!

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: CHAIRMAN GREENSPAN.
text: But it's important for us to be aware that it may be necessary to preserve what has been really an extraordinary success to date on inflation. I must say, looking back, that I think we've had some lucky things happen to us. One of them is that our policy has been able to rein in inflation at a much more rapid pace than we had contemplated earlier. And it would be a shame if we were to let that get away. President Forrestal. 

MR. FORRESTAL. "Mr. Chairman, I would support your recommendation."

Full utterance: Mr. Chairman, I would support your recommendation. A point of clarification: I assume you're talking about a 1/4 point move?

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): ambiguous
Prior discussion:
speaker: MR. HOENIG.
text: First of all, I'd start by saying that there is a lot [of stimulus] in the pipeline and we should be patient. However, as I mentioned yesterday, our projections are that the real economy might actually grow more slowly than what is in the Greenbook forecast, and that gives me some pause. I also am concerned about the growth of M2, which I think has been erratic and too slow. So, I am inclined to go with "B" asymmetric toward ease, but I would wait until we have some more information on the real economy and on M2 before I would charge forward. 
speaker: CHAIRMAN GREENSPAN.
text: First Vice President Hendricks. 

MR. HENDRICKS. "and we would not like to see any significant shortfall from that path this quarter."

Full utterance: We've had several years of moderate growth and our view is that the inflation trend appears to be a decline to 3 percent and that it may be getting down even beyond that. We see the basic thrust of policy as being consistent with that outlook: that is, 3 percent inflation in '92 and 2 percent, perhaps, in '93. Therefore, we feel that the FOMC does have some room for further easing if the policy action that was adopted in December does not stimulate growth in money and credit. M2 seems to have been particularly erratic over the past month or so, making it difficult to judge just what sort of growth track we're really on. For the year we'd like growth in M2 of 3-1/2 percent or so and we would not like to see any significant shortfall from that path this quarter. Consequently, we would like to see further easing in policy should the incoming data suggest that M2 is weakening from current levels. Our position for now, however, is in line with the Greenbook projection and your suggestion, Mr. Chairman. We would support alternative B with asymmetry toward ease.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MS. PHILLIPS.
text: I know they mean something and maybe they only mean something in hindsight. So, I certainly agree that it's something we need to pay attention to but shouldn't get rattled by. But there are a number of remaining concerns, so I would support your proposal based on them, Mr. Chairman. 
speaker: CHAIRMAN GREENSPAN.
text: President Jordan. 

MR. JORDAN. "And I hope very, very much that it comes from the long end."

Full utterance: Over the last couple of months we have had the steepest yield curve in several decades from bills to bonds. And putting bills on a coupon equivalent basis so we can understand what it is [and say] anything with any confidence at all about the future would indicate that the yield curve tends to flatten as the expansion progresses so that most likely later this year, or a year from now, we'll get a yield curve that is flatter than it is today. And I hope very, very much that it comes from the long end. In fact, if I were still in the private sector I'd probably be willing to bet that that flattening will occur at the long end as concerns over fiscal policy tend to dissipate and people become comfortable with the idea that expansion can not only occur but may even be robust without any kind of inflation. But I am concerned about what has been happening to the yield curve in the last several weeks. The flattening has been occurring starting at the long end and kind of rolling down the curve, first with the 10-year note moving up toward the 3-year area and rolling down to the 3-year area. And David Mullins's comments about the forward rates I thought were very perceptive [unintelligible] market. So, we have had a flattening from 3 years on out and a considerable steepening from 1 year to 3 years, and at the same time a shift up in the 3- and 6-month and 1-year bill rates. I was interested in the go-around on the economy to hear about the false start last year and concerns that it might happen again. But one of the differences today is that we have a bill rate above the funds rate and it has been so for some weeks. That hasn't happened in a couple of years. If that continues with the flattening or rolling down of the yield curve toward the shorter end and we get upward pressure on short rates, especially from the bill rates pushing up relative to the funds rate, then I would like to know what the implications for Desk operations are going to be if the funds rate is held firm at the 4 percent level. I think, if we're right about the outlook, that the funds rate at 4 percent is too high as inflation expectations subside and as the long end rallies back down. But I'd be concerned about not having the leeway to allow the funds rate to be pulled up if these bill rates start to be under a lot of upward pressure in the spring months. So, for that reason I'd like to see [the language] symmetric in either direction.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MR. JORDAN.
text: That hasn't happened in a couple of years. If that continues with the flattening or rolling down of the yield curve toward the shorter end and we get upward pressure on short rates, especially from the bill rates pushing up relative to the funds rate, then I would like to know what the implications for Desk operations are going to be if the funds rate is held firm at the 4 percent level. I think, if we're right about the outlook, that the funds rate at 4 percent is too high as inflation expectations subside and as the long end rallies back down. But I'd be concerned about not having the leeway to allow the funds rate to be pulled up if these bill rates start to be under a lot of upward pressure in the spring months. So, for that reason I'd like to see [the language] symmetric in either direction. 

CHAIRMAN GREENSPAN. "The consensus as I hear it is to support the last directive."

Full utterance: The consensus as I hear it is to support the last directive. So, if the Secretary would read it for us--

Opinion: no
Prior discussion:
speaker: MR. JORDAN.
text: Whatever it was they were looking at, they were thinking "Uh oh!" and trying to keep us from doing what we otherwise would have done. 
speaker: MS. LOVETT.
text: Even though they didn't want to have to do that! 
speaker: MR. JORDAN.
text: What is your reaction to that kind of heuristic action-reaction? We would have wound up doing something in reserve supplying operations that really wasn't consistent with what we wanted to do because of this perception. And then they would have a perception on the other side regarding what we might do and try to game it in order to prevent us from doing it. 

MS. LOVETT. "So, the fact that the perception out there was that at certain rate levels and at certain times we didn't have a tolerance [for actions] that would cause people to bid the rate up is part of what one has to call the "market dynamics.""


Opinion: no
Prior discussion:
speaker: MR. SYRON.
text: Do you think its effectiveness is diminished now as compared to the first [intervention]? 
speaker: MR. MCDONOUGH.
text: I guess the best test of that is that last Thursday the Treasury staff up to just below the Secretary was very inclined to want to intervene; I spent a fair amount of time trying to convince them that it wasn't a good idea. At one stage I moved in my good friend, Mr. Truman, to help. And the two of us I think dissuaded them largely, in addition to policy considerations, on the grounds that it just wouldn't work. 
speaker: CHAIRMAN GREENSPAN.
text: President Forrestal. 

MR. FORRESTAL. "[as the reason for intervention], but I feel constrained to say that I was extremely surprised at this intervention, particularly the second and the third [operations]."

Full utterance: Well, Mr. Chairman, I've heard the rationale of disorderly markets [as the reason for intervention], but I feel constrained to say that I was extremely surprised at this intervention, particularly the second and the third [operations]. Of course, I would respect the judgment of the Desk and Bill with regard to whether the markets were in fact disorderly. But we've had extensive discussions over the last year or so in the Committee about the effectiveness of sterilized intervention, and I thought it was the sense of this group that, unless we were going to follow intervention with some kind of substantive monetary policy move, intervention was not the policy of the Committee. I haven't been clear, Bill, whether or not this might have been instigated by the Treasury, but from your remarks I gathered that that was not entirely so. What really compounds the problem with respect to our credibility is having intervention and then having that followed by the Secretary's statement that he's looking for lower interest rates. That to me made us look extremely silly, to put it mildly. So, Mr. Chairman, I'm just confused as to what the policy of the Committee is. And I guess I'd be interested in knowing what really constitutes a disorderly market in the minds of the Desk. I didn't think hitting a postwar low or coming close to a postwar low with respect to the mark constituted a disorderly market, but maybe there are factors that I'm not aware of.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. FORRESTAL.
text: And I guess I'd be interested in knowing what really constitutes a disorderly market in the minds of the Desk. I didn't think hitting a postwar low or coming close to a postwar low with respect to the mark constituted a disorderly market, but maybe there are factors that I'm not aware of. 
speaker: CHAIRMAN GREENSPAN.
text: President Parry. 
speaker: MR. PARRY.
text: President Forrestal covered it. 
speaker: CHAIRMAN GREENSPAN.
text: Go ahead. 

MR. JORDAN. "Would the benefits be diminished if we are very open and acknowledge that when the market is receptive to our selling foreign currencies, we would do so?"


Opinion: no
Prior discussion:
speaker: CHAIRMAN GREENSPAN.
text: President Hoenig. 
speaker: MR. HOENIG.
text: Mike, I'd like to follow up on Ed Boehne's question. If I understood you correctly, you were saying that within the context of having provided a fair amount of liquidity for the readjustment, you are expecting things to improve down the road next year and beyond based on where rates have already fallen. But if the improvement doesn't happen, you suggested toward the end of your comments that we might have to make substantial reductions in rates to move the economy along. Having said that, is your discussion about a modest reduction now an insurance policy on the rates that have already come down or did I misunderstand you? 

MR. PRELL. "Basically, as we were putting this forecast together, my sense was that given the behavior of the Committee what we were forecasting seemed highly probable and that, unless you switched gears, some slight further easing would be consistent behavior."

Full utterance: Well, I guess it could be viewed that way in the context of a prevailing expectation now that some small amount of easing is going to be occurring, which might have a little negative effect on bond yields if the market were disappointed, all other things equal. Basically, as we were putting this forecast together, my sense was that given the behavior of the Committee what we were forecasting seemed highly probable and that, unless you switched gears, some slight further easing would be consistent behavior. We did not assume anything that we felt was really material to the basic thrust of the forecast. As we indicated, we are thinking only of a small fractional further decline in the funds rate as being in the range that underlies this forecast. If our story is right, most of the decline in long rates that we have projected would occur even if the funds rate were held at 3 percent. But that's a conjecture. Basically what I said in my briefing was that we have the expansion beginning to pick up gradually fairly soon. If something is wrong in our analysis, the only logical conclusion we could draw in terms of policy implications is that more needs to be done if you want to do at least as well if not better than the forecast. We're falling short of what the Committee's expectations were for economic activity as it stands, so that was the conclusion we reached.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MR. LINDSEY.
text: We have the possibility of collapse in Russia this winter. And we always have the Middle East. So, to [abuse] a phrase, maybe what we're seeing is "deja voodoo," in line with Attila the Hun and the witch doctor. We've been here twice before and I would not be overly optimistic since all we're seeing, really, is an improvement in attitudes. 
speaker: CHAIRMAN GREENSPAN.
text: President Melzer. 

MR. MELZER. "So, I was reminded of that and thought I'd share that."


Opinion: no
Prior discussion:
speaker: MR. MULLINS.
text: There is some risk in putting [our faith] in fundamentals in the sense that we may reassemble in May and look back, if we do have a couple of bad numbers, on almost three quarters of an imbedded trend in core CPI at 4-1/2 percent. But at this stage I would support the Chairman's judgment to ride this out a bit longer before responding and therefore hold off. I don't know that there's much advantage in trying to signal with an asymmetric directive; we might as well make a judgment as we go along here. So, I would support "B" symmetric and the alternative language. 
speaker: CHAIRMAN GREENSPAN.
text: President Melzer. 

MR. MELZER. "I'd probably be more concerned if we hadn't seen the slowdown in M1, reserves, the base, and so forth over the last couple of months."

Full utterance: I could accept your proposal, Alan. As I think about the symmetry issue, we might as well take the heat when we make a move, not through some words. We've been to that movie recently and it's probably not worth it. There are two things that influence my thinking right now. I'd probably be more concerned if we hadn't seen the slowdown in M1, reserves, the base, and so forth over the last couple of months. As you know, I don't think those are an appropriate target for policy, but I do think they have some value as an indicator of the thrust, and they have slowed down. The other thing is that we're looking at higher inflation numbers, although David makes the point very well that we're still probably not looking at enough numbers yet to be sure. It's dangerous to overreact to high frequency data. But I agree with what Al Broaddus said, that if we wait until we're absolutely sure we're looking at inflation and expectations have become imbedded, it's very hard to catch up, as you said too.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MR. PRELL.
text: So, overall import prices have not been rising very rapidly at all. In fact, for the first quarter, non-oil import prices are estimated to have declined. So I don't think to date that we've seen, overall, a major unfavorable impact from import prices. In particular areas it has been a factor. 
speaker: CHAIRMAN GREENSPAN.
text: President Jordan. 

MR. JORDAN. "In reading the Greenbook for this meeting and listening to your comments and then thinking back over the analysis in the Greenbooks over the last 8 or 9 months and the swings in sentiment and developments as reported in various statistical [measures], it's tempting to have a sense of security that we're in a sort of fail-safe zone:"

Full utterance: In reading the Greenbook for this meeting and listening to your comments and then thinking back over the analysis in the Greenbooks over the last 8 or 9 months and the swings in sentiment and developments as reported in various statistical [measures], it's tempting to have a sense of security that we're in a sort of fail-safe zone: That in the longer term nothing much can really go wrong even though we get surprised in the short run. We entered the fourth quarter with an expectation of a quite weak quarter in nominal GDP and real GDP with a 3 percent funds rate. And the surprise was that it was a much, much stronger quarter than expected. During that quarter as we were looking ahead to '93, the first quarter in particular, there was an expectation of fairly strong nominal GDP growth and real output growth; the surprise was that real output growth [in the first quarter] was much weaker than expected. And by some measures prices have been much higher than expected, yet we still have a 3 percent funds rate. When I look at your forecast through '94 in terms of nominal growth, real growth, and inflation it assumes a continuation of the 3 percent funds rate. It is still the right number in spite of all of these developments. It seems to me--and this is where I'd like you to comment on the way your model works--that when we have a development like the first quarter and real output comes in weak and inflation is reported to be much higher, it's not something to be concerned about because it means that the real interest rate has fallen or the natural rate or something because of the higher inflation and that will take care of the weakness in real growth. But out in the future because of the slack, the gap, the NAIRU or something, inflation will decelerate; that will raise the real interest rate so that no matter what happens it's going to turn out that the 3 percent funds rate is the right rate. I'd be curious as to what it would take to persuade you that it's either too high or too low! [Laughter]

Opinion: yes
About monetary policy: yes