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value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
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fomc | 1,995 | Tom, may I just ask you a quick question? | 11 |
fomc | 1,995 | Yes. | 2 |
fomc | 1,995 | You are raising a tricky problem. Al Broaddus is saying that their research, and I suspect most other research, indicates that there is content with respect to future actions embodied in the statements. If you want to leave full flexibility for the Committee for the future, then by definition the announcement cannot ha... | 247 |
fomc | 1,995 | What I would want would be the latter, what you just described--a description of our rationale for taking the action. | 24 |
fomc | 1,995 | If we are successful, the correlations in Al's studies should go to zero--theoretically. | 20 |
fomc | 1,995 | I doubt that we could do that. It would be hard. These things are read and parsed very carefully, and whatever we say to explain what we did by reference to the past, even if we don't mean it to, will be interpreted as having some implications for the future. If we now make an interest rate move and say not a single wo... | 135 |
fomc | 1,995 | It has been our usual practice to read the draft statement to the Committee. The purpose of that statement is to capture the essence of the Committee's reasoning. I think it is crucial to avoid the optional differences in phraseology that we all have, which I think is impossible to do with 19 people or 12 people. Unles... | 219 |
fomc | 1,995 | I think what you just said is exactly what the subcommittee had in mind. | 16 |
fomc | 1,995 | Would anybody object to this as a procedure? | 9 |
fomc | 1,995 | It would be helpful if we had a chance to look at the statement in draft form and make whatever comment we deem important. Just very briefly, in the research on the discount rate announcements--it is not exactly analogous--some researchers have tried to distinguish between alignment announcements, which really do not h... | 157 |
fomc | 1,995 | I have three more people on the list. Vice Chairman McDonough. | 15 |
fomc | 1,995 | I am very strongly persuaded that we should announce policy decisions. As I have mentioned before, our previous practice would make it possible in today's very sophisticated financial markets, had we continued that procedure, to give an advantage for only 10 seconds or half a minute to the more sophisticated market par... | 115 |
fomc | 1,995 | There is a big difference. | 6 |
fomc | 1,995 | It is the symmetric directive issue. | 7 |
fomc | 1,995 | No. Somebody has argued--I have forgotten who it was; it may have been Don Kohn--that there is an important difference. Suppose we purposely delayed an interest rate change for 48 hours pending somebody's speech or some statistical release, and we said there was no change, and then 48 hours later we made a change; it w... | 73 |
fomc | 1,995 | That is right; I had not heard that argument. | 11 |
fomc | 1,995 | If we say the Committee has made no decision or something like that, we still have full flexibility to make a change later. | 25 |
fomc | 1,995 | The point I want to emphasize is that we should continue to have Joe Coyne announce that the Committee meeting is over and that there is no further announcement. | 31 |
fomc | 1,995 | Yes, I think that works. | 7 |
fomc | 1,995 | I think the content of what we have had to say in our announcements of policy changes has been quite good. Personally, looking back to August 16, I wish that we had not said that these actions are expected to be sufficient at least for a time to meet the objective of sustained noninflationary growth. Since I was very s... | 99 |
fomc | 1,995 | Mr. Chairman, I would like to put another point on the table. That is, the Committee made several policy changes last spring that involved only open market operations and not discount rates. In those cases, except for that first change, you simply announced the fact that the rate had changed without a full explanation ... | 154 |
fomc | 1,995 | The subcommittee's proposal was the former. A statement with an interest rate change was the subcommittee's recommendation. The full Committee can reject it if there is no discount rate change. | 37 |
fomc | 1,995 | So there would be no announcement unless the discount rate is changed? | 13 |
fomc | 1,995 | No. Either. | 4 |
fomc | 1,995 | Either. | 2 |
fomc | 1,995 | Either or. | 3 |
fomc | 1,995 | An announcement would accompany an interest rate change, whichever kind of interest rate it was. | 17 |
fomc | 1,995 | A statement would say more than just "we changed the interest rate" but would give at least some boilerplate explanation as to why we changed. | 29 |
fomc | 1,995 | A very brief explanation. | 5 |
fomc | 1,995 | President Hoenig. | 4 |
fomc | 1,995 | First of all, I agree on immediate announcements, and I like the way we have done it. That is, when we take no action, we say there is no announcement. Regarding the statement, I think it should give no reason or be extremely brief. We started making announcements to make sure there is no advantage to anyone. Our proce... | 167 |
fomc | 1,995 | President Minehan. | 4 |
fomc | 1,995 | I also am in agreement with the announcement policy, but I would like to argue for a bit of flexibility on whether we do or do not announce "no change." There are instances where no change is not a change in policy. There are instances where the reverse is true. For example, if we decided not to do anything at this mee... | 177 |
fomc | 1,995 | I would leave the statement wording to you, Mr. Chairman, because I don't think there is any way we can draft it as a Committee. I would like to hear the statement before it is released, but I would give you the flexibility. I also feel that President Broaddus' suggestion of having a staff draft to work from has some i... | 137 |
fomc | 1,995 | The point at issue is that if it is more than boilerplate, Governor Blinder is absolutely right. There is no way to make any value-neutral statement in the English language. There is always some value element involved. We have always had time to have a statement written in advance, and I would suggest that short of an ... | 145 |
fomc | 1,995 | Are we talking about the directive or the actual statement itself? | 12 |
fomc | 1,995 | Just the statement. | 4 |
fomc | 1,995 | We have not been writing the statement in advance, have we? | 13 |
fomc | 1,995 | Yes. When we were doing the discount rate announcements, we always had a draft if there was a possibility of a change in the rate. We would have a tentative statement to be read in the event that the votes were there. | 46 |
fomc | 1,995 | Two-handed intervention! | 4 |
fomc | 1,995 | I would like to raise a minor, or maybe not so minor, objection to that. Don Kohn, I believe, has been the drafter of the statement, but the fact that he has had it in pectore rather than on the table means that the debate is not inhibited by people looking at the statement and seeing what the party line may be. | 73 |
fomc | 1,995 | No, the statement has always been discussed after the vote. | 12 |
fomc | 1,995 | I thought you were suggesting that you were going to have it available for people while they were voting. | 20 |
fomc | 1,995 | No, we vote and then decide what it is-- | 11 |
fomc | 1,995 | What we voted on! | 5 |
fomc | 1,995 | What we have been doing recently is to vote and then discuss what type of statement would be issued should the Board approve a discount rate change that would be part of the decision. That was never done to my recollection until after the FOMC had voted. | 52 |
fomc | 1,995 | I understand how it has worked. I, at least, got confused by what you said just now. | 21 |
fomc | 1,995 | Yes. | 2 |
fomc | 1,995 | I am sorry. I would say that if we are going through a process involving an FOMC vote, and it is going to be either preceded or followed by a discount rate change, the statement that is to be used in the discount rate announcement should be indicated to the FOMC, at least in approximate form, after the FOMC vote. If th... | 101 |
fomc | 1,995 | President Boehne. | 5 |
fomc | 1,995 | Just a couple of comments: I might state somewhat differently than did the Vice Chairman the rationale for why we are doing what we are doing. We are trying to make the best possible monetary policy decisions and that depends very crucially on the quality of the deliberative process. At the same time, we also want to b... | 463 |
fomc | 1,995 | President Jordan. | 3 |
fomc | 1,995 | I agree with announcing as we have done over the past year, including the indication as appropriate that the meeting has adjourned and there is no further announcement. As far as the substance is concerned, though, I think your characterization, Mr. Chairman, of the message about the future is the important criterion. ... | 242 |
fomc | 1,995 | Governor Phillips. | 3 |
fomc | 1,995 | I agree that it is appropriate to make announcements of policy changes, and when there are no changes to continue to indicate that meetings have ended. With respect to the statements, I think that, as a general matter, making them as short as possible is probably the best rule of thumb. We always have to leave open the... | 146 |
fomc | 1,995 | That is the end of the list. I would just like to add my own views. I would like to align myself very strongly with Cathy Minehan's views on the "no change." We would not want to be committed to making a statement every time we did nothing. | 55 |
fomc | 1,995 | Right. | 2 |
fomc | 1,995 | Many of those times we have nothing to say. There have been times in history when not changing the interest rate was the news or changing the interest rate was the non-news. I would certainly like to see us have the flexibility to make an announcement and explain why we decided not to change interest rates, where that ... | 372 |
fomc | 1,995 | I generally agree with the thrust of what has been said. Let me just preface it by saying, as a newcomer, that I think the announcement policy of the past year has been working quite well. Essentially, what we are doing is ratifying the current practice. Certainly, we should continue announcing our policy changes after... | 267 |
fomc | 1,995 | One way to resolve this issue of whether to make an announcement when there is no change in policy is to view it as a policy question that should be part of our debate. In other words, if we are in a situation where part of the response that we expect to get stems from our doing nothing, that is a major policy issue, n... | 213 |
fomc | 1,995 | He won't say that! | 5 |
fomc | 1,995 | There would be no announcement unless there is something positive to be gained as a result of making one, in which case that would be part of what we would discuss and we would instruct Joe accordingly. I would guess that that may happen once a year, maybe less. I do think that leaving the issue open in the abstract an... | 75 |
fomc | 1,995 | That is exactly what I had in mind, Mr. Chairman. | 13 |
fomc | 1,995 | I think we may have reached a consensus. It sounds like one. | 14 |
fomc | 1,995 | Why don't you try to define it? | 8 |
fomc | 1,995 | I have been assigned to define the consensus. The consensus is that on interest rate changes, be they federal funds rate changes only or discount rate changes only or both, there will normally be a statement. I think there was a strong consensus that those statements should be terse. A draft of them should normally be ... | 126 |
fomc | 1,995 | Tom. | 2 |
fomc | 1,995 | If I may, it seems to me that the last part of that should be stated the other way. There is a presumption that if there is no policy change, the meeting would end with no announcement. An exception would be made if there is a policy consideration to be served, which we would discuss at the meeting. Is that what I hear... | 71 |
fomc | 1,995 | Yes, I think so. | 6 |
fomc | 1,995 | That is what it is. | 6 |
fomc | 1,995 | Yes. An announcement when there is no policy change is an exception and must be agreed to during the discussion in the FOMC meeting. | 28 |
fomc | 1,995 | Thank you. | 3 |
fomc | 1,995 | Any objection to that summary, which I thought was scholarly? | 12 |
fomc | 1,995 | A much higher grade than I would have given it. Thank you. | 14 |
fomc | 1,995 | I am emotionally involved with CRA! [Laughter] | 11 |
fomc | 1,995 | The second issue relates to the tapes and transcripts. The subcommittee is basically recommending the status quo except for the issue of an occasional off-the-tape discussion that is not about monetary policy. It may be, for example, about some confidential personnel matter. Other people may have other examples, but mo... | 76 |
fomc | 1,995 | Unfortunately I am going to be dissenting on this. I realize I am in the minority. The discussion in your memo says there is a strong consensus that we would all be better off if the practice of taping FOMC meetings had never begun. That is true. It is also true that this Committee never authorized the maintenance of t... | 333 |
fomc | 1,995 | President Melzer. | 4 |
fomc | 1,995 | A couple of comments: First, on this issue of turning the tape off for certain periods of time, I have had a concern that in doing that, even though it might be desirable in some respects, we could incur a fairly heavy political cost with respect to how the Federal Reserve is perceived. Apparently, the public perceptio... | 609 |
fomc | 1,995 | As a point of clarification, what did the subcommittee conclude with regard to this point? | 18 |
fomc | 1,995 | When the subcommittee met and drafted its report, we viewed the subpoena option as considerably less likely than we did subsequently--after Virgil's memo pointed to the route through the Government Operations Committee. But a subpoena was already a possibility. I believe our view was that we should resist a subpoena if... | 64 |
fomc | 1,995 | There is a reference to that in our report at the bottom of page 2 and the top of page 3. It is an explicit statement of the conditions under which we would approve turning off the tape. | 42 |
fomc | 1,995 | Where? | 2 |
fomc | 1,995 | It is the very last sentence on page 2 carrying over to page 3 in the subcommittee's report. President Forrestal. | 27 |
fomc | 1,995 | I must say that when it was revealed that we were taping these sessions, I wished that we had never started this practice. But having thought about this over the past year or so, I have begun to think that having the tape may not really be all that bad. It does provide evidence of the accountability of the Federal Rese... | 426 |
fomc | 1,995 | President Minehan. | 4 |
fomc | 1,995 | I would like to align myself with most of what President Forrestal had to say. I do see the need for such a record for reasons of accountability, but I have a question. We have tapes and we have lightly edited transcripts. Do we have to keep both of these? Are both the full record, or do we get rid of the tapes upon th... | 125 |
fomc | 1,995 | No. Once the edited transcript is approved by the participants, the tape can be dispensed with. | 20 |
fomc | 1,995 | And so can the draft, lightly edited, that is sent to the members for review. | 18 |
fomc | 1,995 | Okay. | 2 |
fomc | 1,995 | The approved record would be the edited transcripts. | 9 |
fomc | 1,995 | So the lightly edited transcript is what we are talking about in terms of what might be subpoenaed. In this connection I would like to note that there has been some delay in terms of our getting the word-for-word transcript. I have not seen one in a little while; maybe I am just behind in my work. To the extent that th... | 76 |
fomc | 1,995 | The transcript for the December 20 meeting came out several days ago. | 14 |
fomc | 1,995 | The lightly edited version? | 5 |
fomc | 1,995 | That transcript was sent out about the 12th of January. | 13 |
fomc | 1,995 | Really? | 2 |
fomc | 1,995 | The draft version for you to correct. | 8 |
fomc | 1,995 | I saw the minutes for the December meeting. I have not seen that transcript. I don't know why. | 21 |
fomc | 1,995 | One point of clarification, President Minehan: For earlier meetings before the Committee started to review the transcripts--that is, those before January of last year--we are not permitted to throw away the raw transcripts. | 42 |
fomc | 1,995 | Right. | 2 |
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