TextCEsInFinance/fomc-communication

index int64 0 1.98k	text stringlengths 13 1.05k	year int64 2k 2.02k	label int64 0 2	text_label stringclasses 3 values
1,553	Perhaps because those asset prices are important to spending, key macroeconomic indicators, such as the unemployment rate, exhibit a similar pattern.	2,007	2	neutral
1,554	Despite the uncertainties, the consensus estimates of the NAIRU and the growth of potential give us a hint about what type of landing we should be aiming for and which of the scenarios depicted in figure 1 best describe the economy's initial conditions and prospects.	1,999	2	neutral
1,555	The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.	2,013	2	neutral
1,556	The forecast for headline inflation was in the same range as that for core inflation in 2008 and 2009, reflecting expectations that energy prices would level off and then turn down and that increases in food prices would slow to a pace more in line with core inflation.	2,007	2	neutral
1,557	It was generally agreed that developments relating to energy would continue to exert upward pressure on prices over the near term, including the passthrough or indirect effects of higher oil prices on core measures of inflation.	2,020	1	hawkish
1,558	The federal funds rate averaged a little higher than the level expected with an unchanged policy stance, in part because of unexpectedly high demand for reserves in late July and early August.	2,007	1	hawkish
1,559	A third factor underpinning longer-run prospects for growth is the sustained strong uptrend in labor productivity.	2,005	0	dovish
1,560	The U. S. international trade deficit narrowed in May, as a large increase in exports of goods and services more than offset a moderate increase in imports.	2,010	0	dovish
1,561	This role is largely a reflection of the New York Fed's responsibility for implementing monetary policy decisions through its open market desk operations.	1,999	2	neutral
1,562	Although the moderation in the growth of aggregate demand would help limit inflation pressures over time, the Committee judged that some inflation risks remained.	2,018	1	hawkish
1,563	Consumer spending firmed somewhat during the first quarter despite the rising unemployment rate and significant financial strains.	2,014	0	dovish
1,564	First, I will discuss the available empirical evidence from the United States on the effect of changes in asset prices on household consumption and business investment.	2,005	2	neutral
1,565	It would have been difficult for the Committee to put forward a 7 percent unemployment goal when the current program started and unemployment was 8.1 percent; this would have involved a lot of uncertainty about the magnitude of asset purchases required to reach this goal.	2,004	0	dovish
1,566	However, the increase in real GDP was projected to be sufficient to reduce slack in the labor market only slowly, and the unemployment rate was expected to remain elevated at the end of 2012.	1,998	2	neutral
1,567	So you’re talking about the inflation target, basically.	2,019	2	neutral
1,568	To a considerable extent, however, any uptick in inflation expectations likely represented a reversal of anticipated declines in inflation earlier this year when economic prospects had seemed weaker and survey data did not confirm any increase in long-term inflation expectations.	1,998	2	neutral
1,569	Participants expected that fiscal policy would continue to be a drag on economic growth over coming quarters.	2,008	0	dovish
1,570	M2 and M3 have posted very large gains in recent months, reflecting the effects of recent System easing actions on market interest rates and shifts of funds by households out of investments in equities and lower-rated corporate debt.	2,008	0	dovish
1,571	So it’s a double whammy coming from higher gasoline prices.	2,016	1	hawkish
1,572	In the view of one member, however, aggregate final demand was so strong that, with economic activity and the associated demand for labor having expanded at an unsustainable pace for some time, one could be reasonably confident that inflation would most likely pick up in the absence of policy action.	1,996	1	hawkish
1,573	The October SLOOS suggested that the recent slowdown in mortgage originations for home purchases was partly attributable to weaker demand.	2,002	0	dovish
1,574	Second, the correction in equity prices points to a downward revision to consumer spending and to business fixed investment and residential construction as well.	2,006	0	dovish
1,575	The unemployment rate was 3.5 percent in February and has been at or near half-century lows for almost two years.	2,015	2	neutral
1,576	Total nonfarm payroll employment was reported to have decreased in September, consistent with a substantial increase in the number of people who reported themselves as being absent from work due to bad weather and with payroll declines in the hurricane-affected states of Texas and Florida.	2,013	0	dovish
1,577	So you’re right, you’re seeing—I, I can’t remember the number, but it might be in the 3s—3, 3½ percent growth for next year.	2,019	2	neutral
1,578	The members also agreed that the risks remained weighted mainly in the direction of greater inflation pressures and that further tightening actions might be necessary to bring about financial conditions that were sufficiently firm to contain upward pressures on labor costs and prices.	2,006	1	hawkish
1,579	In considering the effectiveness of the operating regime, the staff observed that over recent years, the Federal Reserve had been able to implement monetary policy in an environment with ample reserves by adjusting administered rates--including the rates on required and excess reserve balances and the offered rate at the overnight reverse repurchase agreement facility--without needing to actively manage the supply of reserves.	2,011	2	neutral
1,580	core CPI inflation remained low.	2,006	1	hawkish
1,581	The tendency may be natural to allow more flexibility when central banks are focused on inflation maintenance than when they seek inflation reduction.	2,021	0	dovish
1,582	Once such expectations became imbedded in the economy, even stronger policy actions would be required in order to reestablish a downward trend of inflation.	1,998	1	hawkish
1,583	I guess I would also urge you to remember that when you look at the projections, that there are many factors that affect those projections, and changes in tax policy—that’s only one of a number of factors, including incoming data that has, to some extent, altered the outlook for growth and inflation.	2,019	2	neutral
1,584	several others thought that progress in achieving the Committee's inflation objective might lag if further appreciation of the dollar continued to depress non-energy commodity prices or if inflation was slow to respond to tighter resource utilization.	2,017	2	neutral
1,585	In any case, we, our job is to deliver price stability, and I think—you can think of price stability as an asset that just delivers large benefits to society over a long period of time.	2,022	1	hawkish
1,586	It will be a while before we can be sure that a self-sustaining expansion is underway of sufficient strength and persistence to put the economy back on a path toward full employment.	2,000	0	dovish
1,587	In a nutshell, I believe that the factors of globalization, deregulation, and financial innovation, arising partly in response to episodes of high inflation, have effectively eroded the central bank monopoly on the provision of monetary services and have enhanced global competition among currencies.	2,020	2	neutral
1,588	In their discussion of the economic situation and the outlook, meeting participants viewed the information received over the intermeeting period as suggesting that economic activity had been expanding moderately despite the global economic and financial developments of recent months.	2,020	2	neutral
1,589	But this is largely accounted for by a convergence of inflation rates.	2,006	2	neutral
1,590	The International Monetary Fund projects that global economic growth in 2019 will be the slowest since the financial crisis.	2,020	0	dovish
1,591	For the Monetary Policy Committee (MPC) at the Bank of England, they find heterogeneous views among voters, but no systematic differences based on whether the MPC member is an insider--that is part of the hierarchy at the Bank--or an outsider appointed for a short term just to the MPC; whether the person comes from an academic background; or whether that person has worked at the Treasury.	2,020	2	neutral
1,592	Under this interpretation, the lower line in the bottom panel of Figure 1 is an estimate of market inflation expectations over the next five years, and the upper line represents five-year forward expectations of inflation, that is, today's expectation of what average inflation will be between 2009 and 2014.	2,005	2	neutral
1,593	But, by June, prices had risen 4 percent over the previous 12 months, ticked up to 4.2 percent in July, and increased further to 4.3 percent in August.	2,004	1	hawkish
1,594	The members generally agreed that, if necessary, their concerns about rising inflation could be addressed at the meeting in early February.	2,012	1	hawkish
1,595	While anecdotal reports suggested that softening was confined to only a few areas, the delayed effects of the drop in stock market prices and forecasts of slower employment and income growth suggested some moderation in housing activity at some point.	2,017	0	dovish
1,596	In light of asset market developments over the intermeeting period, which in large part appeared to reflect heightened expectations among investors that the Federal Reserve would undertake additional purchases of longer-term securities, the November forecast was conditioned on lower long-term interest rates, higher stock prices, and a lower foreign exchange value of the dollar than was the staff's previous forecast.	2,004	0	dovish
1,597	Participants noted the considerable uncertainty surrounding estimates of the output and unemployment gaps and the extent of their effects on prices.	2,011	2	neutral
1,598	The Decline in Long-Term Interest Rates and the Role of Monetary Policy One of the most remarkable and fundamental changes in the global financial landscape over the past three decades has been the steady and significant decline in global sovereign bond yields.	2,003	0	dovish
1,599	Relative to the average episode, commercial real estate prices neither fell much during the recession nor rose a lot during the expansion.	2,004	2	neutral
1,600	But first, please allow me to offer a few remarks on the economic outlook and Federal Reserve monetary policy.	2,000	2	neutral
1,601	In the course of the Committee's discussion of the outlook for inflation, members commented that there was no persuasive evidence in recent statistical measures that price inflation was currently picking up or that inflation expectations were rising, though the declines in both inflation and expectations experienced over the course of recent years no longer seemed to be occurring.	1,996	2	neutral
1,602	Notably, if people feel sure that inflation will remain well controlled, they will be more restrained in their wage-setting and pricing behavior, which (in something of a virtuous circle) makes it easier for the Federal Reserve to confirm their expectations by keeping inflation low.	2,003	1	hawkish
1,603	Core inflation was then expected to edge down in 2009 as the impetus from prior increases in the prices of imports, energy, and other commodities abated and the margin of slack in resource use widened.	2,000	0	dovish
1,604	If, in their quest to reduce macroeconomic risk, policymakers overshoot and ease policy too much, they need to be willing to expeditiously remove at least part of that ease before inflationary pressures become a threat.	2,019	1	hawkish
1,605	A potential negative cited by some members was the possibility that a weak job market, should it persist, would at some point adversely affect overall consumer sentiment and willingness to spend.	2,003	0	dovish
1,606	In addition, at every policy meeting, each member of the MPC is operating with the same information from the staff, and before the quarterly meetings that precede an Inflation Report, the members have sat through a number of discussions covering all aspects of the forecast.	2,000	2	neutral
1,607	What we really mean is that we would look at—we know that inflation will move around on both sides of the target, and what we say is that we would be equally concerned with inflation persistently above as persistently below the target.	2,017	2	neutral
1,608	Later in the week, however, market interest rates moved up in response to the release of the minutes of the February meeting and the mention therein of some sentiment for a larger policy tightening than had been undertaken.	2,022	1	hawkish
1,609	Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.	1,996	0	dovish
1,610	Again, the FOMC has done just that through its commitment to adjust policy as required to keep inflation at bay.	2,007	1	hawkish
1,611	the outlook for housing activity remained favorable, given an overall economic performance in line with current forecasts of a robust expansion, related growth in incomes, and still relatively attractive mortgage interest rates.	1,997	1	hawkish
1,612	Participants' Views on Current Economic Conditions and the Economic Outlook In conjunction with this FOMC meeting, participants submitted their projections of the most likely outcomes for real GDP growth, the unemployment rate, and inflation for each year from 2021 through 2024 and over the longer run based on their individual assessments of appropriate monetary policy, including the path of the federal funds rate.	1,999	2	neutral
1,613	As a monetary policy maker, I am interested in these links because the prices of financial assets affect the spending decisions of firms and households and because these prices may reveal forward-looking information relevant for setting policy.	2,017	2	neutral
1,614	Geopolitical uncertainties, notably those relating to developments in Iraq, frequently were cited by business contacts as a major reason for caution, but other factors inhibiting capital expenditures evidently included excess capacity and limited prospects for profits because of increased energy, insurance, pension, and other costs and a concomitant inability to raise selling prices.	2,010	1	hawkish
1,615	Weaker demand and significantly lower oil prices were holding down consumer price inflation.	2,009	0	dovish
1,616	The staff forecast prepared for this meeting suggested that the expansion in economic activity would slow in coming quarters to a pace somewhat above that of the economy's estimated potential and would moderate a bit further in 1998.	2,019	1	hawkish
1,617	Committee Policy Action Members viewed the information on U. S. economic activity received over the intermeeting period as suggesting that the economy had been expanding moderately and generally agreed that the economic outlook was broadly similar to that at the time of their March meeting.	2,007	2	neutral
1,618	Now, we have—you know, we haven’t anticipated that slowdown in productivity, and that’s one of the main reasons why we haven’t anticipated the relatively slow growth.	2,021	0	dovish
1,619	Recent data suggested that growth of household spending had moderated from its strong fourth-quarter pace, while business fixed investment continued to grow strongly.	2,008	2	neutral
1,620	These are, you know, this is—this is the economy at nearly full employment or in the range—in the neighborhood of full employment.	2,022	1	hawkish
1,621	As long as the Federal Reserve is required to set and report ranges for money and debt growth, it should update them as appropriate.	2,013	2	neutral
1,622	This information helps Committee members deduce how their own actions and statements are likely to affect asset prices and yields.	2,003	2	neutral
1,623	And one reason for that is that long-term interest rates generally embody two factors.	2,011	2	neutral
1,624	Generally speaking, the growth of profits and the related buildup of cash have been broadly distributed across industries.	1,998	2	neutral
1,625	Most believed that downside risks to economic growth had diminished somewhat since the April meeting, but were still significant.	2,021	0	dovish
1,626	Even so, in the absence of major overhangs in inventories of business equipment and consumer durables, and given favorable conditions in financial markets, members believed that a resumption of moderate, sustainable growth after a relatively brief period of weakness was the most likely outlook for the economy.	2,004	2	neutral
1,627	The rationale for monetary policy tightening is, in my judgment, quite straightforward and flows from two assessments about the current state of the economy.	2,007	1	hawkish
1,628	In this case headline inflation will rise well above its underlying trend as the price of energy rises	2,020	1	hawkish
1,629	Finally, while my assessment of maximum employment incorporates a wide range of indicators to assess the state of the labor marketâ€”including indicators of labor compensation, productivity, and price-cost markupsâ€”the employment data I look at, such as the Kansas City Fed's Labor Market Conditions Indicators, are historically highly correlated with the unemployment rate.9 My expectation today is that the labor market by the end of 2022 will have reached my assessment of maximum employment if the unemployment rate has declined by then to the SEP median of modal projections of 3.8 percent.	2,006	2	neutral
1,630	Major equity indexes appeared to be supported by lower interest rates and posted modest gains despite the increases in energy prices.	2,017	2	neutral
1,631	The staff's near-term forecast for inflation was revised up a little, as recent data showed somewhat faster-than-anticipated increases that were judged to be only partly transitory.	2,005	1	hawkish
1,632	In this less comfortable world, restoring price stability can involve a painful process of slow growth and elevated unemployment.	2,019	1	hawkish
1,633	The associated range for growth of total domestic nonfinancial sector debt was provisionally set at 3 to 7 percent for 1999.	2,009	2	neutral
1,634	Nonetheless, those restraining influences were expected to abate over time and economic activity strengthen gradually.	1,996	2	neutral
1,635	They noted that the realization of such a development could make it harder for the Committee to achieve 2 percent inflation over the longer run.	1,996	2	neutral
1,636	The first area is the characterization of good monetary policy in increasingly realistic and complex model environments.	2,013	2	neutral
1,637	Of course, if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal, we would not hesitate to act.	2,020	1	hawkish
1,638	Conclusion To sum up, none of us, obviously, can see the future, and instead we shall have to monitor incoming data closely for evidence of any shifts in recent productivity trends.	2,007	2	neutral
1,639	Equity prices in most foreign countries were up moderately since the January FOMC meeting.	2,005	2	neutral
1,640	The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations.	2,009	2	neutral
1,641	To abstract from the potential effects of cyclical factors on the yield curve, consider the pattern of forward rates many years into the future, at which point the effects of current cyclical shocks would be expected to no longer be important.2 Such forward rates reflect not only market expectations of future short-term interest rates	2,003	2	neutral
1,642	Accordingly, while the weight of current economic output is probably only modestly higher than it was a half century ago, value added, adjusted for price change, has risen well over threefold.	2,004	2	neutral
1,643	While these developments were positive, participants noted several factors that likely would continue to restrain the expansion in economic activity.	2,006	0	dovish
1,644	China has eased some of its most stringent COVID containment measures but recently revived travel restrictions in some areas, and its approach to the pandemic remains an upside risk for inflation.	2,007	1	hawkish
1,645	If labor demand cools, will separations increase and shift the curve outward, increasing unemployment further?	2,001	0	dovish
1,646	Many would ask what challenges could monetary policymakers possibly face in the U.S., given the remarkable combination of consistent above-trend growth and declining inflation?	1,999	2	neutral
1,647	The Committee's accompanying statement noted that economic growth had slowed over the course of the year, partly reflecting a substantial cooling of the housing market.	2,004	0	dovish
1,648	While accommodative financial conditions and reduced income tax rates should continue to undergird consumer spending and the data on retail sales for July displayed relatively impressive gains, negative wealth effects from falling stock market prices, declining payrolls, and sluggish income gains--should they persist--might well depress consumer expenditures over coming months.	2,017	0	dovish
1,649	Real yields increased more than their nominal counterparts, while inflation compensation implied by Treasury Inflation-Protected Securities declined.	2,008	2	neutral
1,650	Many participants noted that they expected household spending to be a primary contributor to economic growth going forward.	2,002	2	neutral
1,651	But some would argue that monetary policy is actually further away from neutral, based on the fact that current inflation is so much higher than the federal funds rate.	1,997	1	hawkish
1,652	Nevertheless, the role of this consideration in inflation dynamics should not be overlooked or underestimated.	1,999	2	neutral

1,553

Perhaps because those asset prices are important to spending, key macroeconomic indicators, such as the unemployment rate, exhibit a similar pattern.

2,007

2

neutral

1,554

Despite the uncertainties, the consensus estimates of the NAIRU and the growth of potential give us a hint about what type of landing we should be aiming for and which of the scenarios depicted in figure 1 best describe the economy's initial conditions and prospects.

1,999

2

neutral

1,555

The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.

2,013

2

neutral

1,556

The forecast for headline inflation was in the same range as that for core inflation in 2008 and 2009, reflecting expectations that energy prices would level off and then turn down and that increases in food prices would slow to a pace more in line with core inflation.

2,007

2

neutral

1,557

It was generally agreed that developments relating to energy would continue to exert upward pressure on prices over the near term, including the passthrough or indirect effects of higher oil prices on core measures of inflation.

2,020

1

hawkish

1,558

The federal funds rate averaged a little higher than the level expected with an unchanged policy stance, in part because of unexpectedly high demand for reserves in late July and early August.

2,007

1

hawkish

1,559

A third factor underpinning longer-run prospects for growth is the sustained strong uptrend in labor productivity.

2,005

0

dovish

1,560

The U. S. international trade deficit narrowed in May, as a large increase in exports of goods and services more than offset a moderate increase in imports.

2,010

0

dovish

1,561

This role is largely a reflection of the New York Fed's responsibility for implementing monetary policy decisions through its open market desk operations.

1,999

2

neutral

1,562

Although the moderation in the growth of aggregate demand would help limit inflation pressures over time, the Committee judged that some inflation risks remained.

2,018

1

hawkish

1,563

Consumer spending firmed somewhat during the first quarter despite the rising unemployment rate and significant financial strains.

2,014

0

dovish

1,564

First, I will discuss the available empirical evidence from the United States on the effect of changes in asset prices on household consumption and business investment.

2,005

2

neutral

1,565

It would have been difficult for the Committee to put forward a 7 percent unemployment goal when the current program started and unemployment was 8.1 percent; this would have involved a lot of uncertainty about the magnitude of asset purchases required to reach this goal.

2,004

0

dovish

1,566

However, the increase in real GDP was projected to be sufficient to reduce slack in the labor market only slowly, and the unemployment rate was expected to remain elevated at the end of 2012.

1,998

2

neutral

1,567

So you’re talking about the inflation target, basically.

2,019

2

neutral

1,568

To a considerable extent, however, any uptick in inflation expectations likely represented a reversal of anticipated declines in inflation earlier this year when economic prospects had seemed weaker and survey data did not confirm any increase in long-term inflation expectations.

1,998

2

neutral

1,569

Participants expected that fiscal policy would continue to be a drag on economic growth over coming quarters.

2,008

0

dovish

1,570

M2 and M3 have posted very large gains in recent months, reflecting the effects of recent System easing actions on market interest rates and shifts of funds by households out of investments in equities and lower-rated corporate debt.

2,008

0

dovish

1,571

So it’s a double whammy coming from higher gasoline prices.

2,016

1

hawkish

1,572

In the view of one member, however, aggregate final demand was so strong that, with economic activity and the associated demand for labor having expanded at an unsustainable pace for some time, one could be reasonably confident that inflation would most likely pick up in the absence of policy action.

1,996

1

hawkish

1,573

The October SLOOS suggested that the recent slowdown in mortgage originations for home purchases was partly attributable to weaker demand.

2,002

0

dovish

1,574

Second, the correction in equity prices points to a downward revision to consumer spending and to business fixed investment and residential construction as well.

2,006

0

dovish

1,575

The unemployment rate was 3.5 percent in February and has been at or near half-century lows for almost two years.

2,015

2

neutral

1,576

Total nonfarm payroll employment was reported to have decreased in September, consistent with a substantial increase in the number of people who reported themselves as being absent from work due to bad weather and with payroll declines in the hurricane-affected states of Texas and Florida.

2,013

0

dovish

1,577

So you’re right, you’re seeing—I, I can’t remember the number, but it might be in the 3s—3, 3½ percent growth for next year.

2,019

2

neutral

1,578

The members also agreed that the risks remained weighted mainly in the direction of greater inflation pressures and that further tightening actions might be necessary to bring about financial conditions that were sufficiently firm to contain upward pressures on labor costs and prices.

2,006

1

hawkish

1,579

In considering the effectiveness of the operating regime, the staff observed that over recent years, the Federal Reserve had been able to implement monetary policy in an environment with ample reserves by adjusting administered rates--including the rates on required and excess reserve balances and the offered rate at the overnight reverse repurchase agreement facility--without needing to actively manage the supply of reserves.

2,011

2

neutral

1,580

core CPI inflation remained low.

2,006

1

hawkish

1,581

The tendency may be natural to allow more flexibility when central banks are focused on inflation maintenance than when they seek inflation reduction.

2,021

0

dovish

1,582

Once such expectations became imbedded in the economy, even stronger policy actions would be required in order to reestablish a downward trend of inflation.

1,998

1

hawkish

1,583

I guess I would also urge you to remember that when you look at the projections, that there are many factors that affect those projections, and changes in tax policy—that’s only one of a number of factors, including incoming data that has, to some extent, altered the outlook for growth and inflation.

2,019

2

neutral

1,584

several others thought that progress in achieving the Committee's inflation objective might lag if further appreciation of the dollar continued to depress non-energy commodity prices or if inflation was slow to respond to tighter resource utilization.

2,017

2

neutral

1,585

In any case, we, our job is to deliver price stability, and I think—you can think of price stability as an asset that just delivers large benefits to society over a long period of time.

2,022

1

hawkish

1,586

It will be a while before we can be sure that a self-sustaining expansion is underway of sufficient strength and persistence to put the economy back on a path toward full employment.

2,000

0

dovish

1,587

In a nutshell, I believe that the factors of globalization, deregulation, and financial innovation, arising partly in response to episodes of high inflation, have effectively eroded the central bank monopoly on the provision of monetary services and have enhanced global competition among currencies.

2,020

2

neutral

1,588

In their discussion of the economic situation and the outlook, meeting participants viewed the information received over the intermeeting period as suggesting that economic activity had been expanding moderately despite the global economic and financial developments of recent months.

2,020

2

neutral

1,589

But this is largely accounted for by a convergence of inflation rates.

2,006

2

neutral

1,590

The International Monetary Fund projects that global economic growth in 2019 will be the slowest since the financial crisis.

2,020

0

dovish

1,591

For the Monetary Policy Committee (MPC) at the Bank of England, they find heterogeneous views among voters, but no systematic differences based on whether the MPC member is an insider--that is part of the hierarchy at the Bank--or an outsider appointed for a short term just to the MPC; whether the person comes from an academic background; or whether that person has worked at the Treasury.

2,020

2

neutral

1,592

Under this interpretation, the lower line in the bottom panel of Figure 1 is an estimate of market inflation expectations over the next five years, and the upper line represents five-year forward expectations of inflation, that is, today's expectation of what average inflation will be between 2009 and 2014.

2,005

2

neutral

1,593

But, by June, prices had risen 4 percent over the previous 12 months, ticked up to 4.2 percent in July, and increased further to 4.3 percent in August.

2,004

1

hawkish

1,594

The members generally agreed that, if necessary, their concerns about rising inflation could be addressed at the meeting in early February.

2,012

1

hawkish

1,595

While anecdotal reports suggested that softening was confined to only a few areas, the delayed effects of the drop in stock market prices and forecasts of slower employment and income growth suggested some moderation in housing activity at some point.

2,017

0

dovish

1,596

In light of asset market developments over the intermeeting period, which in large part appeared to reflect heightened expectations among investors that the Federal Reserve would undertake additional purchases of longer-term securities, the November forecast was conditioned on lower long-term interest rates, higher stock prices, and a lower foreign exchange value of the dollar than was the staff's previous forecast.

2,004

0

dovish

1,597

Participants noted the considerable uncertainty surrounding estimates of the output and unemployment gaps and the extent of their effects on prices.

2,011

2

neutral

1,598

The Decline in Long-Term Interest Rates and the Role of Monetary Policy One of the most remarkable and fundamental changes in the global financial landscape over the past three decades has been the steady and significant decline in global sovereign bond yields.

2,003

0

dovish

1,599

Relative to the average episode, commercial real estate prices neither fell much during the recession nor rose a lot during the expansion.

2,004

2

neutral

1,600

But first, please allow me to offer a few remarks on the economic outlook and Federal Reserve monetary policy.

2,000

2

neutral

1,601

In the course of the Committee's discussion of the outlook for inflation, members commented that there was no persuasive evidence in recent statistical measures that price inflation was currently picking up or that inflation expectations were rising, though the declines in both inflation and expectations experienced over the course of recent years no longer seemed to be occurring.

1,996

2

neutral

1,602

Notably, if people feel sure that inflation will remain well controlled, they will be more restrained in their wage-setting and pricing behavior, which (in something of a virtuous circle) makes it easier for the Federal Reserve to confirm their expectations by keeping inflation low.

2,003

1

hawkish

1,603

Core inflation was then expected to edge down in 2009 as the impetus from prior increases in the prices of imports, energy, and other commodities abated and the margin of slack in resource use widened.

2,000

0

dovish

1,604

If, in their quest to reduce macroeconomic risk, policymakers overshoot and ease policy too much, they need to be willing to expeditiously remove at least part of that ease before inflationary pressures become a threat.

2,019

1

hawkish

1,605

A potential negative cited by some members was the possibility that a weak job market, should it persist, would at some point adversely affect overall consumer sentiment and willingness to spend.

2,003

0

dovish

1,606

In addition, at every policy meeting, each member of the MPC is operating with the same information from the staff, and before the quarterly meetings that precede an Inflation Report, the members have sat through a number of discussions covering all aspects of the forecast.

2,000

2

neutral

1,607

What we really mean is that we would look at—we know that inflation will move around on both sides of the target, and what we say is that we would be equally concerned with inflation persistently above as persistently below the target.

2,017

2

neutral

1,608

Later in the week, however, market interest rates moved up in response to the release of the minutes of the February meeting and the mention therein of some sentiment for a larger policy tightening than had been undertaken.

2,022

1

hawkish

1,609

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.

1,996

0

dovish

1,610

Again, the FOMC has done just that through its commitment to adjust policy as required to keep inflation at bay.

2,007

1

hawkish

1,611

the outlook for housing activity remained favorable, given an overall economic performance in line with current forecasts of a robust expansion, related growth in incomes, and still relatively attractive mortgage interest rates.

1,997

1

hawkish

1,612

Participants' Views on Current Economic Conditions and the Economic Outlook In conjunction with this FOMC meeting, participants submitted their projections of the most likely outcomes for real GDP growth, the unemployment rate, and inflation for each year from 2021 through 2024 and over the longer run based on their individual assessments of appropriate monetary policy, including the path of the federal funds rate.

1,999

2

neutral

1,613

As a monetary policy maker, I am interested in these links because the prices of financial assets affect the spending decisions of firms and households and because these prices may reveal forward-looking information relevant for setting policy.

2,017

2

neutral

1,614

Geopolitical uncertainties, notably those relating to developments in Iraq, frequently were cited by business contacts as a major reason for caution, but other factors inhibiting capital expenditures evidently included excess capacity and limited prospects for profits because of increased energy, insurance, pension, and other costs and a concomitant inability to raise selling prices.

2,010

1

hawkish

1,615

Weaker demand and significantly lower oil prices were holding down consumer price inflation.

2,009

0

dovish

1,616

The staff forecast prepared for this meeting suggested that the expansion in economic activity would slow in coming quarters to a pace somewhat above that of the economy's estimated potential and would moderate a bit further in 1998.

2,019

1

hawkish

1,617

Committee Policy Action Members viewed the information on U. S. economic activity received over the intermeeting period as suggesting that the economy had been expanding moderately and generally agreed that the economic outlook was broadly similar to that at the time of their March meeting.

2,007

2

neutral

1,618

Now, we have—you know, we haven’t anticipated that slowdown in productivity, and that’s one of the main reasons why we haven’t anticipated the relatively slow growth.

2,021

0

dovish

1,619

Recent data suggested that growth of household spending had moderated from its strong fourth-quarter pace, while business fixed investment continued to grow strongly.

2,008

2

neutral

1,620

These are, you know, this is—this is the economy at nearly full employment or in the range—in the neighborhood of full employment.

2,022

1

hawkish

1,621

As long as the Federal Reserve is required to set and report ranges for money and debt growth, it should update them as appropriate.

2,013

2

neutral

1,622

This information helps Committee members deduce how their own actions and statements are likely to affect asset prices and yields.

2,003

2

neutral

1,623

And one reason for that is that long-term interest rates generally embody two factors.

2,011

2

neutral

1,624

Generally speaking, the growth of profits and the related buildup of cash have been broadly distributed across industries.

1,998

2

neutral

1,625

Most believed that downside risks to economic growth had diminished somewhat since the April meeting, but were still significant.

2,021

0

dovish

1,626

Even so, in the absence of major overhangs in inventories of business equipment and consumer durables, and given favorable conditions in financial markets, members believed that a resumption of moderate, sustainable growth after a relatively brief period of weakness was the most likely outlook for the economy.

2,004

2

neutral

1,627

The rationale for monetary policy tightening is, in my judgment, quite straightforward and flows from two assessments about the current state of the economy.

2,007

1

hawkish

1,628

In this case headline inflation will rise well above its underlying trend as the price of energy rises

2,020

1

hawkish

1,629

Finally, while my assessment of maximum employment incorporates a wide range of indicators to assess the state of the labor marketâ€”including indicators of labor compensation, productivity, and price-cost markupsâ€”the employment data I look at, such as the Kansas City Fed's Labor Market Conditions Indicators, are historically highly correlated with the unemployment rate.9 My expectation today is that the labor market by the end of 2022 will have reached my assessment of maximum employment if the unemployment rate has declined by then to the SEP median of modal projections of 3.8 percent.

2,006

2

neutral

1,630

Major equity indexes appeared to be supported by lower interest rates and posted modest gains despite the increases in energy prices.

2,017

2

neutral

1,631

The staff's near-term forecast for inflation was revised up a little, as recent data showed somewhat faster-than-anticipated increases that were judged to be only partly transitory.

2,005

1

hawkish

1,632

In this less comfortable world, restoring price stability can involve a painful process of slow growth and elevated unemployment.

2,019

1

hawkish

1,633

The associated range for growth of total domestic nonfinancial sector debt was provisionally set at 3 to 7 percent for 1999.

2,009

2

neutral

1,634

Nonetheless, those restraining influences were expected to abate over time and economic activity strengthen gradually.

1,996

2

neutral

1,635

They noted that the realization of such a development could make it harder for the Committee to achieve 2 percent inflation over the longer run.

1,996

2

neutral

1,636

The first area is the characterization of good monetary policy in increasingly realistic and complex model environments.

2,013

2

neutral

1,637

Of course, if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal, we would not hesitate to act.

2,020

1

hawkish

1,638

Conclusion To sum up, none of us, obviously, can see the future, and instead we shall have to monitor incoming data closely for evidence of any shifts in recent productivity trends.

2,007

2

neutral

1,639

Equity prices in most foreign countries were up moderately since the January FOMC meeting.

2,005

2

neutral

1,640

The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations.

2,009

2

neutral

1,641

To abstract from the potential effects of cyclical factors on the yield curve, consider the pattern of forward rates many years into the future, at which point the effects of current cyclical shocks would be expected to no longer be important.2 Such forward rates reflect not only market expectations of future short-term interest rates

2,003

2

neutral

1,642

Accordingly, while the weight of current economic output is probably only modestly higher than it was a half century ago, value added, adjusted for price change, has risen well over threefold.

2,004

2

neutral

1,643

While these developments were positive, participants noted several factors that likely would continue to restrain the expansion in economic activity.

2,006

0

dovish

1,644

China has eased some of its most stringent COVID containment measures but recently revived travel restrictions in some areas, and its approach to the pandemic remains an upside risk for inflation.

2,007

1

hawkish

1,645

If labor demand cools, will separations increase and shift the curve outward, increasing unemployment further?

2,001

0

dovish

1,646

Many would ask what challenges could monetary policymakers possibly face in the U.S., given the remarkable combination of consistent above-trend growth and declining inflation?

1,999

2

neutral

1,647

The Committee's accompanying statement noted that economic growth had slowed over the course of the year, partly reflecting a substantial cooling of the housing market.

2,004

0

dovish

1,648

While accommodative financial conditions and reduced income tax rates should continue to undergird consumer spending and the data on retail sales for July displayed relatively impressive gains, negative wealth effects from falling stock market prices, declining payrolls, and sluggish income gains--should they persist--might well depress consumer expenditures over coming months.

2,017

0

dovish

1,649

Real yields increased more than their nominal counterparts, while inflation compensation implied by Treasury Inflation-Protected Securities declined.

2,008

2

neutral

1,650

Many participants noted that they expected household spending to be a primary contributor to economic growth going forward.

2,002

2

neutral

1,651

But some would argue that monetary policy is actually further away from neutral, based on the fact that current inflation is so much higher than the federal funds rate.

1,997

1

hawkish

1,652

Nevertheless, the role of this consideration in inflation dynamics should not be overlooked or underestimated.

1,999

2

neutral