Prior discussion:
speaker: MR. HOENIG.
text: I, like President Moskow, was fascinated by the productivity discussion and would like to see that analysis. If I were voting, I would say that I prefer to move now, but I would accept your recommendation. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Phillips. 
speaker: MS. PHILLIPS.
text: I support your recommendation of "B" asymmetric. 
speaker: CHAIRMAN GREENSPAN.
text: President Guynn. 

MR. GUYNN. "Our previous forecast plainly suggested the need for such a slowdown."

Full utterance: Mr. Chairman, I could support a decision not to change policy at this time, and if I had a vote this year, I would vote "yes." As Governor Rivlin noted in the earlier go-around, we can take great pride in the low inflation and the strong real activity that we have achieved. At previous meetings, I was among those who argued in favor of letting this thing play out. I think that has been the right thing to do. Having said that, I have come to the view that a modest increase in our fed funds target rate is probably desirable now or sometime soon. In my view, we do need to continue to wonder about whether the hope for a slowdown over the rest of this year and into next year will materialize, at least to the degree that we expect it. Our previous forecast plainly suggested the need for such a slowdown. However, my concern is now rooted in the belief that the rate of growth that we have seen in recent quarters--unless we get a very substantial slowdown--combined with the recent pace of job creation, tight labor markets, and relatively high labor force participation are incompatible with stable inflation over the longer run. This raises a special concern that monetary policy may be accommodating those trends. The current stable inflation performance suggests to me that over the short run, policy may not be too expansionary. Nevertheless, few if any of our forecasts conclude that inflation will moderate under the current policy scenario. Indeed, most forecasts including my own suggest that inflation is most likely to stabilize at its present level or even accelerate slowly. I am convinced that the risks of inflation are now predominantly on the up side. I believe with Tom Melzer that we currently have a unique opportunity to solidify the gains that we have made in recent years on limiting inflation. A growing number of us around this table and others outside the System are coming to the view that the risks of higher inflation, a small uptick at least, have increased. We have a chance to send a very credible and unambiguous signal to the economy and financial markets about our commitment to stem inflation and perhaps to bring it down further over time. The economy's current strength combined with the fact that markets have been expecting a policy adjustment for some time suggest to me that some change could be made at this time or sometime soon without causing either a large deceleration of real economic activity or a disruption to financial markets. Again, while I do not think the timing is critical, I think the time is now or sometime very soon to move against the inflationary uptick that we are seeing. I clearly would prefer an asymmetrical directive if we decide to hold policy steady.

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