kakeith406/op-fed huggingface dataset:
Prior discussion:
speaker: MR. PRELL.
text: We think this will put some damper on what the pickup in inflation otherwise would be going forward. 
speaker: CHAIRMAN GREENSPAN.
text: President Minehan. 
speaker: MS. MINEHAN.
text: As Jack mentioned, most of the good questions already have been asked. Mike, I know we have had an asymmetric risk picture in most of the recent Greenbook forecasts and certainly in the way the Committee has approached setting its directives. Would you say that the risks incorporated in this forecast are larger than they have been in earlier ones in terms of the degree of "judiciousness" that has been used in interpreting some of the evidence? 

MR. PRELL. "We thought that somehow the world now was right and that we had a grasp of its functioning."

Full utterance: One of the risks we repeatedly have pointed to and then last time said it might not be such an asymmetric risk was the role of the stock market and the implications for consumption. As you may recall, the revised national income accounts that we received after the August meeting showed that the saving rate had fallen so that the wealth effect seemingly was working the way one would have expected. We thought that somehow the world now was right and that we had a grasp of its functioning. We were not quite so concerned as we had been about the risk that we would suddenly find consumption surging in a belated response to the accumulation of wealth. In the interim, the stock market has once again risen more than we expected. The difference is not big, but it is there, and consumption expenditures are surpassing even our expectation of a robust upturn in the third quarter. Going forward, I do not have the sense that our forecast implies an asymmetry of risks in terms of aggregate demand being stronger or weaker. But it makes me nervous that we keep making revisions in the same direction, and my sense is that there really is a boom mentality at work in the economy today. The financial markets are supplying ample credit to borrowers, and the ongoing appreciation of share prices, now more concentrated in the smaller cap issues, is providing cheap equity capital for many companies. I worry that these booming conditions may be even more strongly maintained than we have forecast. But in terms of the nuts and bolts of putting this forecast together and the assumptions we have made for deviations from what we think of as normal behavior over time, I don't think we have an obvious tilt in the risks. Let me add something that Don Kohn just whispered in my ear. We have helped, I think, to balance these risks in a sense by changing the policy assumptions. As we talk about the changes in the forecast, you should not overlook that we have incorporated in it a more stringent set of policy actions.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. TRUMAN.
text: This suggests, I would think, that there is a risk of some substantial cumulation on the downside. Now, we could talk ourselves into being too gloomy about these things. 
speaker: MR. PARRY.
text: Sure. 
speaker: MR. TRUMAN.
text: It is useful to think about worse case scenarios, but worse case scenarios do not always come true. Let me just end on that point. 

MR. PARRY. "That seems a little surprising given what happens to the equity market and particularly with the coefficient that you have in terms of net worth."

Full utterance: I have a question for Dave Stockton. The assumption in the forecast is that the saving rate remains basically constant at one half percent. That seems a little surprising given what happens to the equity market and particularly with the coefficient that you have in terms of net worth. I presume that what is happening is that the weakness in the equity market is being offset by such things as lower interest rates, which stimulate consumption. Would you say that your forecast that the saving rate will not be moving up as a result of the assumed decline in the stock market might be a downside risk to the outlook?

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. BOEHNE.
text: I think it is the right measure of response at this point. As far as the tilt is concerned, I'm almost indifferent about it. I believe that we are going to be so driven by events that the tilt is likely to have no substantive influence on what we do. If we had a different disclosure policy and there were an announcement effect, I think it would be worth spending more time on this question, but I am happy to go along with your recommendation. 
speaker: CHAIRMAN GREENSPAN.
text: President Poole. 

MR. POOLE. "It is not just an accident."

Full utterance: I support the proposed cut of 25 basis points. I have a preference for symmetry, but I don't believe the issue is very important. In the long run what we do is what determines the outcome, although I believe that what we say can be extremely important in the short run. So, we need to be clear about our direction and our purpose. We have to emphasize that our intention is to focus on the U.S. economy not because we are unconcerned with what is going on abroad but because we have only one policy instrument. At best, we can serve one policy objective and that should be to achieve price stability or maintain low inflation in the United States. That is a very important message that we need to repeat continuously. Market expectations are very important in terms of how monetary policy exerts its effects in the short run. We have seen a large decline in interest rates in recent months. That is not just good luck. It is not just an accident. It is a consequence of the market's understanding of the Federal Reserve's objectives and what its policy is going to be in the long run. That decline in interest rates could not have occurred if the market did not believe that the incoming data were consistent with low inflation and that we would in time act to bring interest rates down as required to keep the economy in'the neighborhood of full employment. So, I think that the consistent message that we send about the importance that we attach to our long-run objective of price stability is essential to having built in stabilizing effects from market fluctuations in rates. I would like to comment briefly on the discount rate. In the long run, I would like to see the discount rate closer to the federal funds rate, but I think that this is not the time to make any such adjustment. I hope that the Board will accept a 1/4 percentage point cut in the discount rate so that the change in the federal funds rate at this time will be viewed as perfectly normal and will not send any possibly confusing messages to the market.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MR. FERGUSON.
text: We are not precluded from acting preemptively if new information were to tip the balance of risks to the outlook much more decisively toward an unacceptable probability of higher inflation. Such a probability, if it were to emerge, would in my judgment warrant a policy response. We are not there yet in my view, but we may be soon. We must be careful not to misinterpret the signals that we receive. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Kelley. 

MR. KELLEY. "At the pace the economy has been growing, we are very likely getting close to those limits."

Full utterance: Thank you. Mr. Chairman, I would not have thought it possible, but somehow the Committee's policy dilemma continues to deepen rather than to show signs of beginning to resolve itself. The economy continues to surge ahead. We all, or at least most of us, believe that it should and will slow. But we have had good reason to believe that for some time and yet the pace, if anything, has accelerated and there are few signs of slowing so far. If the pace of growth begins to slow as we expect, we likely will have to address the possible need for further easing at some point. If, however, the present pace or something close to it should continue, we soon will almost surely need to consider at what point policy will have to lean into that strength in the interest of sustainability. I say this realizing fully the difficulty that such a policy move could present internationally. But even if one adopted the most optimistic reasonable scenario of the strength and durability of the current virtuous cycle--and I am pretty much in that camp--it is still necessary to realize that it has limits beyond which unsatisfactory conditions begin to gain momentum. At the pace the economy has been growing, we are very likely getting close to those limits. In the Humphrey-Hawkins forecast made at this time last year for 1998, we were well off the mark. Everything turned out to be much better than we expected. Growth was stronger, unemployment lower, yet inflation quiescent. The outcome was literally wonderful. Can we reasonably expect a repeat? I doubt it. At the moment, working with the available data, the risks appear to be decidedly on the upside. But I can envision the possibility, perhaps the likelihood, that this could be reversed very quickly for any of a combination of reasons arising from the domestic or international, real or financial economy. I continue to be uncertain as to which direction our next move may be or when we should take it. But my sense is that the upside risks will have to begin to dissipate soon or they are going to need to be addressed.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): entailment
Prior discussion:
speaker: MR. KOHN.
text: So the Committee is in a difficult position. It is a position, I guess, in which you might argue that neither symmetry nor asymmetry, as the markets potentially see it, accurately represents your perspective. Given the potential reactions to the announcements, the question is how to walk through that minefield, how to least mislead market participants. 
speaker: CHAIRMAN GREENSPAN.
text: Vice Chair. 
speaker: VICE CHAIRMAN MCDONOUGH.
text: Don, even though in the 1994-1995 period we didn't announce a tilt until after the following meeting, do I remember correctly that we did seven consecutive firming moves and that each and every one of them was from a symmetric directive? 

MR. KOHN. "I'm not sure of the subsequent moves because they weren't at every meeting."


Opinion: no
Prior discussion:
speaker: MR. JORDAN.
text: We ought to be ready to go in either direction. We know there's going to come a time when things will again be changing rapidly in a downward direction, and I would prefer to enter that environment with the risks in balance. We do not have balanced risks right now. I think we need to get to a position where we're comfortable that the risks are symmetric as soon as we can. 
speaker: CHAIRMAN GREENSPAN.
text: President Boehne. 

MR. BOEHNE. "We ought to see how reality plays out and go from there."

Full utterance: I think we do need to raise the funds rate 25 basis points today. It seems to me that we are largely boxed in by our rhetoric and we ought to do it and get this episode behind us. There is a reasonable economic rationale for this, given the uncertainty that we're facing, and that is a "take-back" rationale from last fall, with financial markets and the rest of the world doing better. But I think we want to leave open the question of how much of a take-back we need to do. It may be 25, it may be 50, or it may be 75. Who knows? I think we ought to shift the focus back to the economy and back to the data that come in. If, for example, we become more confident about productivity increases, if we have a continuation of the pattern of prices and wages that has prevailed over the past several years, then 25 may be fine. If, on the other hand, we become less confident of the productivity increases and we begin to see some early warning signs that inflation is picking up, then we are going to have to do more. And we ought to do more in those situations. As for the tilt, I think we ought to go back to a symmetric directive today. We need to calm things down. We need to shift the public's emphasis away from psychoanalyzing this Committee and back to the economy; in my view a symmetric directive would help do that. Announcing the tilt, at least in this initial experiment, turned out to be a cruder instrument than I think we had anticipated, largely because of the interaction of rhetoric. At this point we just don't know enough to say how much, or if, we have to raise rates further, and therefore we shouldn't box ourselves in for the future. We ought to see how reality plays out and go from there.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): entailment
Prior discussion:
speaker: MR. MEYER.
text: So, I think at least some further discussion of this issue is worthwhile. And while I don't see us moving any time soon, I think having an opportunity to voice such issues around the table when we have these two-day meetings and to make some incremental progress toward a consensus is really valuable. I have enjoyed this discussion this morning. Thank you. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Gramlich. 

MR. GRAMLICH. "I have enjoyed the discussion, too."

Full utterance: I have enjoyed the discussion, too. Let me cut it a slightly different way. On the inflation targeting issue I think there are three levels on which we can confront this. One is internally in our own heads. At that level I actually find inflation targeting quite useful. I have often thought in terms of that and in my statements have described what we ought to do in those terms, and I will probably continue to do that. There is a second level that I would call internally within the Committee. I agree with others that twice a year it would be a very good idea for Don to put on the agenda a topic that involves our talking about long-run strategies for monetary policy. Maybe the designation of that agenda item could be something a bit less pejorative--for example, "anchors of monetary policy" or something on that order. But I do think it is a good idea for us to have these issues on the agenda for discussion twice a year at a specified time. Maybe as we do that we will converge on what our targeting strategy could be and what kinds of specific targets we might have. Perhaps we won't converge, but I think the exercise would be good for us and we will learn as we talk whether we can converge. There is a third or external level, which is the Congress. That includes whether Congress ought to be giving us inflation targets and that sort of thing. Frankly, I have always thought that these issues are awfully subtle and not easily adapted to Congressional decision-making. If Congress gives us an inflation target, it is going to be pretty rigid; there are going to be times when that target is valuable and there will be other times when we find it very rigid and very confining. So I would get off the train at that point. But on the first two levels, internally in our own heads and internally within the Committee, I would welcome our thinking about monetary policy in these terms; I think that is a good idea. But externally I don't think it's a good idea.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. FISHER.
text: I don't like the metaphor of either a cat's paw or front-running very much, Governor Ferguson. I don't think we're doing either one. Clearly, as Don and I have both said, it is our preference and intent to have the initial discussion of this be put forward through the Chairman's testimony and the Committee's minutes, in which you have a lot more input than I on how it is styled and stated. I think there are ways to introduce this that make clear both the tentative nature of what we're doing and the fact that we are exploring a lot of options. I think that's something well within our ability to convey. 

MR. FERGUSON. "I assume it can be made manageable."

Full utterance: Let me ask you two factual questions. The Chairman just said that there is no effective exchange rate risk involved. On page 5 of your memo, one of the things you say is that the margin needed to protect against both the price risk and the exchange rate risk, even for dollar RPs against foreign governments, is uncertain. If we go down this path, how much exchange rate risk is there really? Is it zero? I assume it can be made manageable.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: VICE CHAIRMAN MCDONOUGH.
text: I think the stance of monetary policy has to make two things clear to all observers. One is that we will ease when we need to, including today. The second is that in addition to today's move, we are prepared to act if and when necessary. Thank you. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Kelley. 

MR. KELLEY. "Our policy choice must be made in the face of this very fundamental uncertainty."

Full utterance: Thank you, Mr. Chairman. There's very little that I can add at this point about the economy, so I'll be brief. But let me try to summarize the situation. It was 100 percent predictable well in advance of the economic slowdown that going through such a period would be painful. We are now in a slowdown and it is painful. It was almost as certain that after a period of slowing a time would come when we would welcome an upturn but would have to go through a very disconcerting stretch of uncertainty about whether an upturn or more decline was in the cards. We seem to be in that stage now. In recent days we've all been studying the data, reading analyses, receiving briefings, and sharing ideas. The bottom line would seem to be this: While there are good reasons to believe that the economy will soon turn up--and I believe that is the highest probability outcome--we cannot know or be overly confident that an upturn is in train. It is still possible that the various negative forces existing today will drag us into further weakness. Our policy choice must be made in the face of this very fundamental uncertainty. In golf, which I play poorly, club selection before a shot usually presents the player with three options--an aggressive choice, a central tendency, and a conservative choice. [Laughter] Each option usually has its own plausibility. In different situations a player might well go with any of the options, depending on his or her objectives at the time and an assessment of the risks. Shortly I expect Don Kohn to tell us that in this game a conservative choice is to ease 25 basis points, 50 basis points is a central tendency, and 75 is aggressive. Of course, the loudest voices in the gallery want us to go for it, but that doesn't mean that we should. In deference to your request that members not discuss policy positions until the next part of the meeting, Mr. Chairman, I will withhold further comments until then. [Laughter]

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): neutral
Prior discussion:
speaker: MS. JOHNSON.
text: In the study our staff used an approach involving a set of OECD countries, and they used OECD data. So the weakest link, if you will, is to find the data. It's certainly possible that if we focused our attention on one or two countries that produce data that they don't all have, we could make some great progress in trying to see what is going on. But we continue to work on this problem. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Meyer. 

MR. MEYER. "Is that fair to say?"


Opinion: no
Prior discussion:
speaker: MR. PARRY.
text: That is made public only with the release of the minutes, which of course occurs two weeks later. 
speaker: VICE CHAIRMAN MCDONOUGH.
text: FOIA is an American law. 
speaker: MR. PARRY.
text: Exactly. 
speaker: MR. FERGUSON.
text: That's right. President Broaddus. 

MR. BROADDUS. "But to come back to something that you said, Roger, this raises a question about the timing of the release of the minutes for the meeting."


Opinion: no
Prior discussion:
speaker: MR. MOSKOW.
text: But if we break the period differently and look at the interval from 1992 to 2000, they actually do well in forecasting inflation, much as they did in the period prior to 1984. The third and last point I'd mention is that this study looked only at forecasting over a twelve-month period. When one looks out over a twenty-four-month period, the Phillips curve models do better than the naive model. So clearly, there are limitations to these Phillips curve types of models, but I wouldn't discard them completely. I think there is some benefit to policymaking from these types of approaches. 

MR. ROLNICK. "They don't show that that gives a stable relationship either."


Opinion: no
Prior discussion:
speaker: MR. OLSON.
text: My feeling, however, is that if the market is impatient, maybe this is the time for us to be patient. On the other hand, as had to be done two or three weeks ago in this city, there was enough anecdotal evidence out there that it was deemed necessary to move to a slightly heightened state of concern. I think the same is true for us. It seems to me that it may be time to move from a code yellow to a code orange. 
speaker: CHAIRMAN GREENSPAN.
text: Governor Bernanke. 

MR. BERNANKE. "The reluctance of firms to hire or invest is particularly discouraging given continued strong spending by consumers and the remarkable growth of productivity."

Full utterance: Thank you, Mr. Chairman. I agree with many speakers today that the recovery remains disappointingly soft. The reluctance of firms to hire or invest is particularly discouraging given continued strong spending by consumers and the remarkable growth of productivity. The consumer and business sectors can't diverge indefinitely. That can be resolved in one of two ways, and one of them is rather unpleasant. A particularly striking aspect of the Greenbook forecast to me is that it envisions continuing declines in core inflation. As shown in the table on page 11 of Part 1, the rate of increase in the core PCE deflator is projected to fall from 1.9 percent in 2001 to 1.3 percent in 2004. Over the same period the core CPI inflation is projected to fall from 2.7 percent to 1.9 percent and growth in the GDP deflator from 2.0 percent to 1.4 percent. Some alternative Greenbook scenarios have the core PCE deflator falling to below 1 percent by 2004. I think inflation as low as projected is potentially a serious risk for the economy. To the extent that we believe the Greenbook projections for inflation as well as the unemployment rate, both of which suggest slack for the foreseeable future, this seems to me to be a prima facie case for easing policy at this point. I understand, of course, that things are never that simple. There's an enormous amount of uncertainty to be reckoned with, and uncertainty suggests caution for central bankers as well as for businesses. One concern I do have about easing now is that it might exacerbate the imbalances in the economy by further heating up sectors that are already strong, such as residential construction and autos, while only indirectly benefiting investment and the labor market. I also appreciate the dangers of excessive fine-tuning, oversteering, and overshooting. For these reasons, I understand that we may want to wait to see how events unfold before taking further action. I hope, though, that we will not set the threshold for taking action too high. The strategy of preemptive strikes should apply with at least as great a force to incipient deflation as it does to incipient inflation. Thank you.

Opinion: yes
About monetary policy: no