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
1,756	In the Committee's discussion of current and prospective economic developments, members referred to the widespread statistical and anecdotal evidence that the surprising strength in economic activity over the closing months of 1996 was persisting in 1997.	1,997	1	hawkish
1,757	In addition, the median estimate of the longer-run normal unemployment rate moved down a tenth to 4.6 percent.	2,022	1	hawkish
1,758	Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.	2,000	0	dovish
1,759	In their discussion of prices, participants indicated that data over the intermeeting period, including measures of inflation expectations, suggested that underlying inflation was not in the process of moving higher.	2,021	2	neutral
1,760	The strong support from monetary policy, together with fiscal stimulus, should turn the K-shaped recovery into a broad-based and inclusive recovery that delivers full employment, as Mike McCracken would have wished.	2,001	0	dovish
1,761	And we’d like to see that in the form of a series of declining monthly inflation readings—that’s what we’re looking for.	2,017	1	hawkish
1,762	In the circumstances, most members endorsed a proposal to delete as no longer necessary the previous summary statement relating to the risks to growth and inflation taken together.	1,996	2	neutral
1,763	What I’m telling you is that the stance of monetary policy we have today, we believe, is appropriate.	2,017	2	neutral
1,764	Much of the current spending for equipment and software reportedly represented replacement demand largely associated with the short useful lives of various types of equipment, and there appeared to be little spending that would entail capital deepening.	2,006	2	neutral
1,765	In their review of the outlook for prices, members noted that incoming data over the intermeeting period had shown a slowing in core inflation from the high levels posted earlier in the year, consistent with the Committee's view that a portion of the earlier increase had reflected transitory factors.	2,020	2	neutral
1,766	Recent data pointed to little change in underlying inflation trends.	2,008	2	neutral
1,767	Financing conditions in capital markets remained broadly accommodative, supported by low interest rates and high equity valuations.	2,014	0	dovish
1,768	In the productivity boom that followed World War I, a chief technological innovation was the spread of electrification to the factory floor.	2,021	2	neutral
1,769	But I have seen little direct evidence on the extent to which globalization may have boosted aggregate productivity growth in the United States in recent years.	2,022	2	neutral
1,770	Moreover, when some measures of inflation were close to 1 percent in 2003, the Federal Open Market Committee's official statements specifically noted that any further substantial decline in inflation would be unwelcome, mainly because of the risk that a falling price level (which has not occurred since the Great Depression) could cause a significant disruption to economic activity and employment.	2,021	0	dovish
1,771	The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.	1,998	2	neutral
1,772	This effort culminated in 1943 with the publication of Banking and Monetary Statistics, which included annual figures on demand and time deposits from 1892 and on currency from 1860.	2,003	2	neutral
1,773	Accordingly, in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, the Committee decided that a slightly higher federal funds rate might be acceptable or a somewhat lower federal funds rate would be acceptable during the intermeeting period.	2,022	2	neutral
1,774	This equation relates inflation to, among other factors, lagged inflation, resource utilization, and movements in the relative price of imports excluding energy, semiconductors, and computers.	2,003	2	neutral
1,775	The steepening of the yield curve was due mostly to sharply lower short- and intermediate-term forward rates, consistent with investors' apparently more pessimistic outlook for economic growth.	2,005	0	dovish
1,776	they differed to some extent regarding the prospects for further increases in inflation.	2,015	2	neutral
1,777	To see this, suppose that a speculative bubble has emerged and that a central bank, operating under a conventional strategy, has raised interest rates to keep the projected output gap closed and expected inflation at its desired level before the bubble bursts.	2,003	1	hawkish
1,778	For inflation, we can use the 12-month change in core PCE prices, a measure of the current underlying rate of inflation.	2,004	2	neutral
1,779	The housing sector has fully recovered from the downturn, supported in part by low mortgage interest rates.	2,021	0	dovish
1,780	But because the United States has run persistent and sizable primary trade deficits since 1990, the net external debt is now 25 percent of GDP and rising sharply.	2,022	1	hawkish
1,781	Indeed, an oft-quoted quip by economist Robert Solow held that, as of the late 1980s, "computers are everywhere except in the productivity statistics."	2,006	2	neutral
1,782	Indeed, scattered evidence dating back to ancient Rome and before reflects the same order of interest rate magnitude, not a one percent interest rate nor 200 percent.	2,005	2	neutral
1,783	Recent data on core consumer prices led the staff to mark down slightly its forecast for core PCE inflation.	2,008	0	dovish
1,784	However, reports from business contacts in several Districts indicated that employers in labor markets in which demand was high or in which workers in some occupations were in short supply were raising wages noticeably to compete for workers and limit turnover.	2,000	1	hawkish
1,785	Other economies, such as Argentina and Hong Kong, have fixed their exchange rates essentially through currency boards.	2,002	2	neutral
1,786	More subtly, my conclusion that the effects on inflation of transitory changes in commodity prices or in the value of the dollar tend to dissipate in the longer run depends on the assumption that the public's inflation expectations are well anchored.	2,002	2	neutral
1,787	another indicated that the Committee could provide guidance stating that it would not raise its target for the federal funds rate if the inflation rate was expected to run below a given level at a specific horizon.	1,999	0	dovish
1,788	Consider our estimates of real economic activity.	2,019	2	neutral
1,789	Now, we’ve long expected, as most analysts have, to see some slowing in Chinese growth over time as they rebalance their economy.	2,021	0	dovish
1,790	In their discussion of forward guidance about the target federal funds rate, a few members suggested that lowering the unemployment threshold to 6 percent could effectively convey the Committee's intention to keep the target federal funds rate low for an extended period.	2,021	0	dovish
1,791	First, insofar as recent productivity growth is concerned, I have a serious question about the quality of the data that we employ to measure output in today's economy.	2,005	2	neutral
1,792	However, some others emphasized that deferring the decision until later in the year would permit additional time to assess the outlook for economic activity and inflation.	2,008	2	neutral
1,793	As Chair Powell indicated in his Jackson Hole remarks, we think of our new framework as an evolution from "flexible inflation targeting" to a "flexible form of average inflation targeting.	2,022	1	hawkish
1,794	In July, the range for M3 had been raised by two percentage points to reflect developments that seemed to be fostering a return to the historical pattern of somewhat faster growth in M3 than in M2.	2,006	0	dovish
1,795	Setting the interest rate paid on required and excess reserve balances 15 basis points below the top of the target range for the federal funds rate was intended to foster trading in the federal funds market at rates well within the FOMC's target range.	2,018	2	neutral
1,796	Consumer credit continued to increase at a steady pace, with similar growth rates across credit card, automobile, and student loans.	2,006	1	hawkish
1,797	While prices in equity markets had turned up from their recent lows, the cumulative losses in financial wealth incurred since early 2000 clearly were having an adverse impact on expenditures by households and the higher cost of equity capital was inhibiting business investment.	2,004	0	dovish
1,798	The American economy is very strong and well positioned to handle tighter monetary policy.	2,016	1	hawkish
1,799	In contrast, the rise in oil prices during the 1970s was probably seen at the time as largely reflecting a permanent shift in global demand/supply balances.	2,022	1	hawkish
1,800	The current global environment highlights the importance of having strong analytic and empirical foundations to understand financial stability considerations for monetary policy, and the research presented today will help strengthen those foundations.1 The global environment of high inflation and rising interest rates highlights the importance of paying attention to financial stability considerations for monetary policy.	2,004	1	hawkish
1,801	Any of these factors might imply that the equilibrium rate relevant for policy returns more quickly to, or even moves above, its long-run level as fewer forces weigh on aggregate demand.	2,022	2	neutral
1,802	One measure of the decline in recent years of the marginal cost of additions to oil availability is the downdrift in the prices of the most distant contracts for future delivery of Light Sweet crude oil.	2,020	2	neutral
1,803	Still, if aggregate demand and potential aggregate supply follow the paths that I outlined earlier, the slack in resource utilization should diminish, unit labor costs should begin to move higher, and the underlying rate of inflation should stabilize.	2,006	2	neutral
1,804	Because his econometric analysis of the available data indicated that money demand was more stable than aggregate demand, Bill formulated a simple rule that adjusted the money growth rate in response to the observed unemployment rate.	2,003	1	hawkish
1,805	Regarding the economic outlook, most participants agreed that economic growth was likely to remain moderate over coming quarters and then pick up gradually.	2,007	2	neutral
1,806	Nonetheless, the Committee judged that some inflation risks remained.	2,021	1	hawkish
1,807	With sales contracting and inventory imbalances still substantial, the manufacturing sector continued its sharp slide, and aggregate employment plunged.	2,007	0	dovish
1,808	The staff's forecast for core PCE price inflation this year was revised down a little in response to recent data.	2,021	0	dovish
1,809	For the United States, for example, the figure highlights the long run-up and subsequent fall in asset prices before the 2001 recession.	2,020	2	neutral
1,810	With the restraint from fiscal policy assumed to increase next year, the staff projected that increases in real GDP would not significantly exceed the growth rate of potential output in 2013.	2,003	2	neutral
1,811	Ultimately inflation is determined by the policy actions of the central bank.	2,000	2	neutral
1,812	The Federal Reserve then sets its policy to achieve the broad objectives assigned to it, specifically, price stability and full employment.	2,020	1	hawkish
1,813	This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments.	2,004	2	neutral
1,814	As its name implies, this rule does not prescribe a particular level of the federal funds rate at a given time but rather how the existing rate should change from quarter to quarter based on two gaps--the difference between inflation and its desired level as well as the difference between the unemployment rate and its longer-run normal level.20 In contrast to the other two rules, the change rule does not take a stand on the value of the longer-run neutral level of the real federal funds rate, thus avoiding a potential source of error.	2,022	2	neutral
1,815	On the other hand, by that metric, the, the September 16, 2020 unemployment rate would have been in the—in the 20s in, in April.	2,021	2	neutral
1,816	growth in the far larger part of the services economy, which has led to low unemployment, good job creation, rising wages, that’s kind of the two big pieces of it that you see.	2,014	1	hawkish
1,817	The second is intermediate-term need for reserve expansion and contraction, arising, for example, from seasonal changes in the demand for currency and reserves.	2,020	2	neutral
1,818	Of the 1,700 Washington employees, roughly 250 are Ph.D. economists, the majority of whom support the Board's monetary policy responsibilities.	2,002	2	neutral
1,819	success was fairly uniform across both the inflation-targeting and nontargeting countries.	2,007	2	neutral
1,820	And the maximum level of employment that’s consistent with price stability evolves over time within a—within a business cycle and over a longer period, in part reflecting [the] evolution of the factors that affect labor supply, including those related to the pandemic.	2,022	2	neutral
1,821	However, in the view of at least some members, recent developments had reduced the unwelcome prospect of substantial additional disinflation.	2,014	2	neutral
1,822	Particularly in light of persistent low readings on inflation and from indicators of inflation expectations along with the risks to the U. S. outlook associated with global economic developments, he noted that a policy rate reduction at the current meeting would help re-center inflation and inflation expectations at levels consistent with the Committee's symmetric 2 percent inflation objective and simultaneously provide some insurance against unexpected developments that could slow U. S. economic growth.	2,001	0	dovish
1,823	too pessimistic on job creation and the decline in the unemployment rate.	2,017	0	dovish
1,824	Greater rates of productivity growth in the United States, compared with still-subdued rates abroad, have apparently engendered comparable differences in risk-adjusted expected rates of return and hence in the demand for U.S.-based investment assets.	1,999	0	dovish
1,825	The expansion of M2 had declined substantially since late spring, apparently in part as a result of the widening opportunity costs of holding assets in M2 stemming from higher market interest rates and possibly also from slackening growth in household incomes.	2,009	1	hawkish
1,826	All members agreed that the statement to be released after the meeting should convey that inflation risks remained dominant and that consequently keeping policy unchanged at this meeting did not necessarily mark the end of the tightening cycle.	1,997	1	hawkish
1,827	In any case, the real federal funds rate is now lower than prior to the easings, at the same time that the unemployment rate is lower and projected growth higher than it was prior to the easings.	2,019	1	hawkish
1,828	Returning to monetary policy, we recognize that there has been a great deal of focus on today’s policy decision.	2,012	2	neutral
1,829	The July-August deficit in U. S. trade in goods and services was higher than its average in the second quarter, as further growth in imports exceeded the rise in exports.	2,002	1	hawkish
1,830	There is no evidence to date that a strong labor market is putting excessive cost-push pressure on price inflation.	2,005	2	neutral
1,831	in particular, core PCE price inflation had been quite stable on a twelve-month basis for some time.	2,011	0	dovish
1,832	Housing demand and consumer spending firmed toward the end of the year, but capital spending remained quite weak in an environment of substantial business uncertainty and pessimism.	2,020	0	dovish
1,833	As a policymaker, I can assure you that any model of inflation that did not take account of these effects, and how they might or might not affect ongoing rates of inflation, would have been of little practical use to the FOMC over the past few years.	2,017	2	neutral
1,834	Weekly data for March, however, indicated that gasoline prices rose sharply.	2,009	1	hawkish
1,835	A major concern that I have about the bubble-popping strategy, however, is that attempts to bring down stock prices by a significant amount using monetary policy are likely to have highly deleterious and unwanted side effects on the broader economy.	1,998	0	dovish
1,836	In connection with the risks associated with an early start to policy normalization, many participants observed that a premature increase in rates might damp the apparent solid recovery in real activity and labor market conditions, undermining progress toward the Committee's objectives of maximum employment and 2 percent inflation.	2,011	2	neutral
1,837	The staff still expected that the pace of economic activity through 2011 would be sufficient to reduce the existing margins of economic slack,	1,997	2	neutral
1,838	Besley, Meads and Surico's contribution is to ask whether certain characteristics of the policymakers matter for how they vote on the monetary policy committee.	2,000	2	neutral
1,839	Confirming that variations in growth rates of liquidity (especially unusual changes in liquidity growth that could be called excessive) systematically lead to wide swings in real asset prices requires further theoretical investigation and more empirical support.	2,019	2	neutral
1,840	Thus, reducing vacancies from an extremely high level to a lower (but still strong) level has a relatively limited effect on hiring and on unemployment.	2,003	2	neutral
1,841	Such second-round effects are likely to be quite limited as long as the rise in the relative price of energy does not lead to a rise in long-run inflation expectations, as has largely been the case in the recent period (figure 1).	2,005	1	hawkish
1,843	Sub-par expansion over the next few quarters was expected to foster an appreciable further easing of pressures on resources and some moderation in core consumer price inflation.	2,002	0	dovish
1,844	Fortunately, as we make monetary policy we have the advantage of several forecasts.	2,008	2	neutral
1,845	We are hopeful that Europe will take additional measures and do all that’s necessary to stabilize the situation and to provide the basis for an ongoing stable structure that—in which banks and sovereigns are both stabilized, in which there’s a program for growth, and in which fiscal arrangements are clear—are made much clearer.	2,020	2	neutral
1,846	M2 growth dropped in the second quarter and remained modest in July, consistent with moderating growth of nominal income and rising opportunity cost.	2,008	1	hawkish
1,847	Tax rebates, declining energy prices, and widespread discounting of retail prices were cited as positive factors in support of consumer spending on a wide range of goods and services.	2,000	2	neutral
1,848	However, waiting was an acceptable alternative given the favorable economic news and the persisting uncertainties surrounding the relationship of output to prices.	2,008	2	neutral
1,849	So let me start with the question pertaining to exchange rates.	2,019	2	neutral
1,850	For a variety of reasons, some emerging-market economies have resisted upward pressures on their exchange rates, even if that resistance requires buying large quantities of dollars to keep their currencies from appreciating.	2,000	0	dovish
1,851	The combination of a commitment to condition liftoff on the sustained achievement of our employment and inflation objectives with yield curve caps targeted at the same horizon has the potential to work well in many circumstances.	2,005	2	neutral
1,852	He also judged that the policy step would do little to improve near-term growth prospects, given the ongoing structural adjustments and external challenges faced by the U. S. economy.	2,010	2	neutral
1,853	The 5.4% unemployment rate in 1996 was the lowest annual rate since 1988 and before that since 1973.	2,005	2	neutral
1,854	In its March forecast, the staff's projection for real GDP growth over the medium term was somewhat higher than the one presented in January, mostly reflecting an improved outlook for economic activity abroad, a lower foreign exchange value for the dollar, and a higher projected path of equity prices.	1,999	2	neutral
1,855	Housing starts and the demand for new homes had declined further, house prices in many parts of the country were falling faster than they had towards the end of 2007, and inventories of unsold homes remained quite elevated.	1,996	0	dovish
1,856	Despite the prevalence and importance of committees in modern central banking, the role of committees in the formulation of policy has not attracted nearly as much academic attention as has the research on monetary policy rules.3 The literature on monetary policy rules stretches back to at least Adam Smith and includes important contributions from David Ricardo, Knut Wicksell, and Milton Friedman.More recently, John Taylor has moved the research agenda forward with his eponymous rule, and a large number of academic papers have been written examining the effectiveness and robustness of policy rules.4 In contrast, as noted, study of the role of committees in making monetary policy has been fairly light, notwithstanding the insightful work of Alan Blinder and others.5 Committees and rules may appear to be in opposition as approaches to policymaking.	1,999	2	neutral

1,756

In the Committee's discussion of current and prospective economic developments, members referred to the widespread statistical and anecdotal evidence that the surprising strength in economic activity over the closing months of 1996 was persisting in 1997.

1,997

1

hawkish

1,757

In addition, the median estimate of the longer-run normal unemployment rate moved down a tenth to 4.6 percent.

2,022

1

hawkish

1,758

Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

2,000

0

dovish

1,759

In their discussion of prices, participants indicated that data over the intermeeting period, including measures of inflation expectations, suggested that underlying inflation was not in the process of moving higher.

2,021

2

neutral

1,760

The strong support from monetary policy, together with fiscal stimulus, should turn the K-shaped recovery into a broad-based and inclusive recovery that delivers full employment, as Mike McCracken would have wished.

2,001

0

dovish

1,761

And we’d like to see that in the form of a series of declining monthly inflation readings—that’s what we’re looking for.

2,017

1

hawkish

1,762

In the circumstances, most members endorsed a proposal to delete as no longer necessary the previous summary statement relating to the risks to growth and inflation taken together.

1,996

2

neutral

1,763

What I’m telling you is that the stance of monetary policy we have today, we believe, is appropriate.

2,017

2

neutral

1,764

Much of the current spending for equipment and software reportedly represented replacement demand largely associated with the short useful lives of various types of equipment, and there appeared to be little spending that would entail capital deepening.

2,006

2

neutral

1,765

In their review of the outlook for prices, members noted that incoming data over the intermeeting period had shown a slowing in core inflation from the high levels posted earlier in the year, consistent with the Committee's view that a portion of the earlier increase had reflected transitory factors.

2,020

2

neutral

1,766

Recent data pointed to little change in underlying inflation trends.

2,008

2

neutral

1,767

Financing conditions in capital markets remained broadly accommodative, supported by low interest rates and high equity valuations.

2,014

0

dovish

1,768

In the productivity boom that followed World War I, a chief technological innovation was the spread of electrification to the factory floor.

2,021

2

neutral

1,769

But I have seen little direct evidence on the extent to which globalization may have boosted aggregate productivity growth in the United States in recent years.

2,022

2

neutral

1,770

Moreover, when some measures of inflation were close to 1 percent in 2003, the Federal Open Market Committee's official statements specifically noted that any further substantial decline in inflation would be unwelcome, mainly because of the risk that a falling price level (which has not occurred since the Great Depression) could cause a significant disruption to economic activity and employment.

2,021

0

dovish

1,771

The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.

1,998

2

neutral

1,772

This effort culminated in 1943 with the publication of Banking and Monetary Statistics, which included annual figures on demand and time deposits from 1892 and on currency from 1860.

2,003

2

neutral

1,773

Accordingly, in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, the Committee decided that a slightly higher federal funds rate might be acceptable or a somewhat lower federal funds rate would be acceptable during the intermeeting period.

2,022

2

neutral

1,774

This equation relates inflation to, among other factors, lagged inflation, resource utilization, and movements in the relative price of imports excluding energy, semiconductors, and computers.

2,003

2

neutral

1,775

The steepening of the yield curve was due mostly to sharply lower short- and intermediate-term forward rates, consistent with investors' apparently more pessimistic outlook for economic growth.

2,005

0

dovish

1,776

they differed to some extent regarding the prospects for further increases in inflation.

2,015

2

neutral

1,777

To see this, suppose that a speculative bubble has emerged and that a central bank, operating under a conventional strategy, has raised interest rates to keep the projected output gap closed and expected inflation at its desired level before the bubble bursts.

2,003

1

hawkish

1,778

For inflation, we can use the 12-month change in core PCE prices, a measure of the current underlying rate of inflation.

2,004

2

neutral

1,779

The housing sector has fully recovered from the downturn, supported in part by low mortgage interest rates.

2,021

0

dovish

1,780

But because the United States has run persistent and sizable primary trade deficits since 1990, the net external debt is now 25 percent of GDP and rising sharply.

2,022

1

hawkish

1,781

Indeed, an oft-quoted quip by economist Robert Solow held that, as of the late 1980s, "computers are everywhere except in the productivity statistics."

2,006

2

neutral

1,782

Indeed, scattered evidence dating back to ancient Rome and before reflects the same order of interest rate magnitude, not a one percent interest rate nor 200 percent.

2,005

2

neutral

1,783

Recent data on core consumer prices led the staff to mark down slightly its forecast for core PCE inflation.

2,008

0

dovish

1,784

However, reports from business contacts in several Districts indicated that employers in labor markets in which demand was high or in which workers in some occupations were in short supply were raising wages noticeably to compete for workers and limit turnover.

2,000

1

hawkish

1,785

Other economies, such as Argentina and Hong Kong, have fixed their exchange rates essentially through currency boards.

2,002

2

neutral

1,786

More subtly, my conclusion that the effects on inflation of transitory changes in commodity prices or in the value of the dollar tend to dissipate in the longer run depends on the assumption that the public's inflation expectations are well anchored.

2,002

2

neutral

1,787

another indicated that the Committee could provide guidance stating that it would not raise its target for the federal funds rate if the inflation rate was expected to run below a given level at a specific horizon.

1,999

0

dovish

1,788

Consider our estimates of real economic activity.

2,019

2

neutral

1,789

Now, we’ve long expected, as most analysts have, to see some slowing in Chinese growth over time as they rebalance their economy.

2,021

0

dovish

1,790

In their discussion of forward guidance about the target federal funds rate, a few members suggested that lowering the unemployment threshold to 6 percent could effectively convey the Committee's intention to keep the target federal funds rate low for an extended period.

2,021

0

dovish

1,791

First, insofar as recent productivity growth is concerned, I have a serious question about the quality of the data that we employ to measure output in today's economy.

2,005

2

neutral

1,792

However, some others emphasized that deferring the decision until later in the year would permit additional time to assess the outlook for economic activity and inflation.

2,008

2

neutral

1,793

As Chair Powell indicated in his Jackson Hole remarks, we think of our new framework as an evolution from "flexible inflation targeting" to a "flexible form of average inflation targeting.

2,022

1

hawkish

1,794

In July, the range for M3 had been raised by two percentage points to reflect developments that seemed to be fostering a return to the historical pattern of somewhat faster growth in M3 than in M2.

2,006

0

dovish

1,795

Setting the interest rate paid on required and excess reserve balances 15 basis points below the top of the target range for the federal funds rate was intended to foster trading in the federal funds market at rates well within the FOMC's target range.

2,018

2

neutral

1,796

Consumer credit continued to increase at a steady pace, with similar growth rates across credit card, automobile, and student loans.

2,006

1

hawkish

1,797

While prices in equity markets had turned up from their recent lows, the cumulative losses in financial wealth incurred since early 2000 clearly were having an adverse impact on expenditures by households and the higher cost of equity capital was inhibiting business investment.

2,004

0

dovish

1,798

The American economy is very strong and well positioned to handle tighter monetary policy.

2,016

1

hawkish

1,799

In contrast, the rise in oil prices during the 1970s was probably seen at the time as largely reflecting a permanent shift in global demand/supply balances.

2,022

1

hawkish

1,800

The current global environment highlights the importance of having strong analytic and empirical foundations to understand financial stability considerations for monetary policy, and the research presented today will help strengthen those foundations.1 The global environment of high inflation and rising interest rates highlights the importance of paying attention to financial stability considerations for monetary policy.

2,004

1

hawkish

1,801

Any of these factors might imply that the equilibrium rate relevant for policy returns more quickly to, or even moves above, its long-run level as fewer forces weigh on aggregate demand.

2,022

2

neutral

1,802

One measure of the decline in recent years of the marginal cost of additions to oil availability is the downdrift in the prices of the most distant contracts for future delivery of Light Sweet crude oil.

2,020

2

neutral

1,803

Still, if aggregate demand and potential aggregate supply follow the paths that I outlined earlier, the slack in resource utilization should diminish, unit labor costs should begin to move higher, and the underlying rate of inflation should stabilize.

2,006

2

neutral

1,804

Because his econometric analysis of the available data indicated that money demand was more stable than aggregate demand, Bill formulated a simple rule that adjusted the money growth rate in response to the observed unemployment rate.

2,003

1

hawkish

1,805

Regarding the economic outlook, most participants agreed that economic growth was likely to remain moderate over coming quarters and then pick up gradually.

2,007

2

neutral

1,806

Nonetheless, the Committee judged that some inflation risks remained.

2,021

1

hawkish

1,807

With sales contracting and inventory imbalances still substantial, the manufacturing sector continued its sharp slide, and aggregate employment plunged.

2,007

0

dovish

1,808

The staff's forecast for core PCE price inflation this year was revised down a little in response to recent data.

2,021

0

dovish

1,809

For the United States, for example, the figure highlights the long run-up and subsequent fall in asset prices before the 2001 recession.

2,020

2

neutral

1,810

With the restraint from fiscal policy assumed to increase next year, the staff projected that increases in real GDP would not significantly exceed the growth rate of potential output in 2013.

2,003

2

neutral

1,811

Ultimately inflation is determined by the policy actions of the central bank.

2,000

2

neutral

1,812

The Federal Reserve then sets its policy to achieve the broad objectives assigned to it, specifically, price stability and full employment.

2,020

1

hawkish

1,813

This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments.

2,004

2

neutral

1,814

As its name implies, this rule does not prescribe a particular level of the federal funds rate at a given time but rather how the existing rate should change from quarter to quarter based on two gaps--the difference between inflation and its desired level as well as the difference between the unemployment rate and its longer-run normal level.20 In contrast to the other two rules, the change rule does not take a stand on the value of the longer-run neutral level of the real federal funds rate, thus avoiding a potential source of error.

2,022

2

neutral

1,815

On the other hand, by that metric, the, the September 16, 2020 unemployment rate would have been in the—in the 20s in, in April.

2,021

2

neutral

1,816

growth in the far larger part of the services economy, which has led to low unemployment, good job creation, rising wages, that’s kind of the two big pieces of it that you see.

2,014

1

hawkish

1,817

The second is intermediate-term need for reserve expansion and contraction, arising, for example, from seasonal changes in the demand for currency and reserves.

2,020

2

neutral

1,818

Of the 1,700 Washington employees, roughly 250 are Ph.D. economists, the majority of whom support the Board's monetary policy responsibilities.

2,002

2

neutral

1,819

success was fairly uniform across both the inflation-targeting and nontargeting countries.

2,007

2

neutral

1,820

And the maximum level of employment that’s consistent with price stability evolves over time within a—within a business cycle and over a longer period, in part reflecting [the] evolution of the factors that affect labor supply, including those related to the pandemic.

2,022

2

neutral

1,821

However, in the view of at least some members, recent developments had reduced the unwelcome prospect of substantial additional disinflation.

2,014

2

neutral

1,822

Particularly in light of persistent low readings on inflation and from indicators of inflation expectations along with the risks to the U. S. outlook associated with global economic developments, he noted that a policy rate reduction at the current meeting would help re-center inflation and inflation expectations at levels consistent with the Committee's symmetric 2 percent inflation objective and simultaneously provide some insurance against unexpected developments that could slow U. S. economic growth.

2,001

0

dovish

1,823

too pessimistic on job creation and the decline in the unemployment rate.

2,017

0

dovish

1,824

Greater rates of productivity growth in the United States, compared with still-subdued rates abroad, have apparently engendered comparable differences in risk-adjusted expected rates of return and hence in the demand for U.S.-based investment assets.

1,999

0

dovish

1,825

The expansion of M2 had declined substantially since late spring, apparently in part as a result of the widening opportunity costs of holding assets in M2 stemming from higher market interest rates and possibly also from slackening growth in household incomes.

2,009

1

hawkish

1,826

All members agreed that the statement to be released after the meeting should convey that inflation risks remained dominant and that consequently keeping policy unchanged at this meeting did not necessarily mark the end of the tightening cycle.

1,997

1

hawkish

1,827

In any case, the real federal funds rate is now lower than prior to the easings, at the same time that the unemployment rate is lower and projected growth higher than it was prior to the easings.

2,019

1

hawkish

1,828

Returning to monetary policy, we recognize that there has been a great deal of focus on today’s policy decision.

2,012

2

neutral

1,829

The July-August deficit in U. S. trade in goods and services was higher than its average in the second quarter, as further growth in imports exceeded the rise in exports.

2,002

1

hawkish

1,830

There is no evidence to date that a strong labor market is putting excessive cost-push pressure on price inflation.

2,005

2

neutral

1,831

in particular, core PCE price inflation had been quite stable on a twelve-month basis for some time.

2,011

0

dovish

1,832

Housing demand and consumer spending firmed toward the end of the year, but capital spending remained quite weak in an environment of substantial business uncertainty and pessimism.

2,020

0

dovish

1,833

As a policymaker, I can assure you that any model of inflation that did not take account of these effects, and how they might or might not affect ongoing rates of inflation, would have been of little practical use to the FOMC over the past few years.

2,017

2

neutral

1,834

Weekly data for March, however, indicated that gasoline prices rose sharply.

2,009

1

hawkish

1,835

A major concern that I have about the bubble-popping strategy, however, is that attempts to bring down stock prices by a significant amount using monetary policy are likely to have highly deleterious and unwanted side effects on the broader economy.

1,998

0

dovish

1,836

In connection with the risks associated with an early start to policy normalization, many participants observed that a premature increase in rates might damp the apparent solid recovery in real activity and labor market conditions, undermining progress toward the Committee's objectives of maximum employment and 2 percent inflation.

2,011

2

neutral

1,837

The staff still expected that the pace of economic activity through 2011 would be sufficient to reduce the existing margins of economic slack,

1,997

2

neutral

1,838

Besley, Meads and Surico's contribution is to ask whether certain characteristics of the policymakers matter for how they vote on the monetary policy committee.

2,000

2

neutral

1,839

Confirming that variations in growth rates of liquidity (especially unusual changes in liquidity growth that could be called excessive) systematically lead to wide swings in real asset prices requires further theoretical investigation and more empirical support.

2,019

2

neutral

1,840

Thus, reducing vacancies from an extremely high level to a lower (but still strong) level has a relatively limited effect on hiring and on unemployment.

2,003

2

neutral

1,841

Such second-round effects are likely to be quite limited as long as the rise in the relative price of energy does not lead to a rise in long-run inflation expectations, as has largely been the case in the recent period (figure 1).

2,005

1

hawkish

1,843

Sub-par expansion over the next few quarters was expected to foster an appreciable further easing of pressures on resources and some moderation in core consumer price inflation.

2,002

0

dovish

1,844

Fortunately, as we make monetary policy we have the advantage of several forecasts.

2,008

2

neutral

1,845

We are hopeful that Europe will take additional measures and do all that’s necessary to stabilize the situation and to provide the basis for an ongoing stable structure that—in which banks and sovereigns are both stabilized, in which there’s a program for growth, and in which fiscal arrangements are clear—are made much clearer.

2,020

2

neutral

1,846

M2 growth dropped in the second quarter and remained modest in July, consistent with moderating growth of nominal income and rising opportunity cost.

2,008

1

hawkish

1,847

Tax rebates, declining energy prices, and widespread discounting of retail prices were cited as positive factors in support of consumer spending on a wide range of goods and services.

2,000

2

neutral

1,848

However, waiting was an acceptable alternative given the favorable economic news and the persisting uncertainties surrounding the relationship of output to prices.

2,008

2

neutral

1,849

So let me start with the question pertaining to exchange rates.

2,019

2

neutral

1,850

For a variety of reasons, some emerging-market economies have resisted upward pressures on their exchange rates, even if that resistance requires buying large quantities of dollars to keep their currencies from appreciating.

2,000

0

dovish

1,851

The combination of a commitment to condition liftoff on the sustained achievement of our employment and inflation objectives with yield curve caps targeted at the same horizon has the potential to work well in many circumstances.

2,005

2

neutral

1,852

He also judged that the policy step would do little to improve near-term growth prospects, given the ongoing structural adjustments and external challenges faced by the U. S. economy.

2,010

2

neutral

1,853

The 5.4% unemployment rate in 1996 was the lowest annual rate since 1988 and before that since 1973.

2,005

2

neutral

1,854

In its March forecast, the staff's projection for real GDP growth over the medium term was somewhat higher than the one presented in January, mostly reflecting an improved outlook for economic activity abroad, a lower foreign exchange value for the dollar, and a higher projected path of equity prices.

1,999

2

neutral

1,855

Housing starts and the demand for new homes had declined further, house prices in many parts of the country were falling faster than they had towards the end of 2007, and inventories of unsold homes remained quite elevated.

1,996

0

dovish

1,856

Despite the prevalence and importance of committees in modern central banking, the role of committees in the formulation of policy has not attracted nearly as much academic attention as has the research on monetary policy rules.3 The literature on monetary policy rules stretches back to at least Adam Smith and includes important contributions from David Ricardo, Knut Wicksell, and Milton Friedman.More recently, John Taylor has moved the research agenda forward with his eponymous rule, and a large number of academic papers have been written examining the effectiveness and robustness of policy rules.4 In contrast, as noted, study of the role of committees in making monetary policy has been fairly light, notwithstanding the insightful work of Alan Blinder and others.5 Committees and rules may appear to be in opposition as approaches to policymaking.

1,999

2

neutral