Source stringclasses 1
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 | The issue is resolved on that date. | 8 |
fomc | 1,995 | My first thought is that if the issue is resolved, you know what the resolution is and where things are going, and everybody else knows--this isn't some inside information the Fed has--I don't know why you wouldn't reduce your rates right away rather than gradually. I'm not sure I see the advantage of gradualism in the... | 111 |
fomc | 1,995 | I thought the question was whether to move in advance. Isn't that what you just said, Larry? You got the right answer but not to the question that you asked. [Laughter] | 38 |
fomc | 1,995 | If I knew now that this was going to happen--is that the question? | 16 |
fomc | 1,995 | If you knew now that this was going to happen and the objective was the same. Maybe, Governor Blinder, you can help me out in phrasing my question. You are right; I don't think Don answered my question. | 46 |
fomc | 1,995 | Am I grading these papers? [Laughter] | 10 |
fomc | 1,995 | No, I'd rather he grade the papers. If that was what was going to happen, would it be more useful to wait until the event and have a sharp reduction on that day or to have a reduction sooner than the event? | 46 |
fomc | 1,995 | If I knew what was going to happen but the markets didn't? | 13 |
fomc | 1,995 | Right. | 2 |
fomc | 1,995 | That's the key because, as I think Mr. Simpson demonstrated last time, if the markets know what will happen they will take bond yields down and that acts basically as an automatic stabilizer. It doesn't matter quite so much how the Fed validates it. Eventually you have to validate it, but the timing of our moves is not... | 216 |
fomc | 1,995 | President Broaddus. | 5 |
fomc | 1,995 | Just a quick comment and a quick question. The comment is that I noticed some changes in the way the Bluebook was constructed and the way you presented some of the information, which I thought was useful and constructive, Don. The question I had: We have had a significant backup in long-term interest rates over the int... | 165 |
fomc | 1,995 | I would say, President Broaddus, that I see it as much more of a mixture, perhaps with a little more emphasis on the real rates but not exclusively the real rates. That is, I think the information that hit us and the market over the intermeeting period was that real growth was stronger at those old interest rates than ... | 214 |
fomc | 1,995 | President Melzer. | 4 |
fomc | 1,995 | Don, first of all I wanted to comment that I really appreciated the remarks you made with respect to the Bluebook. I must say that I read the discussion of real rates in the Bluebook and got a headache! I think what really both red me about it is that I view real rates, like any other real variables, as something we ca... | 328 |
fomc | 1,995 | I don't think I can help your headache. [Laughter] I can try to explain what I was thinking about. I think that the Federal Reserve can affect real rates by changing the federal funds rate, real and nominal, since the two are about the same because inflation expectations don't change in the near term. I think expectati... | 518 |
fomc | 1,995 | I thought it particularly difficult in the context of our most recent experience to make that argument. Let me just leave it there. | 25 |
fomc | 1,995 | Tom, there is no question that you are right on the longer-term rate spectrum, but if hypothetically we just squeezed reserves out of the system, two things would happen: The nominal rate would go up and the inflation rate would go down, and the real rate would have to go up. But I think that is not true in the longer ... | 79 |
fomc | 1,995 | It's not true in the longer run. I get troubled when we start extending that out the yield curve and making judgments as to how it affects the long end of the curve. | 35 |
fomc | 1,995 | I think it is not true in the long run, and it is not true in a long-term forecast of the real funds rate, if I may put it that way. But for a short-term forecast of the real funds rate, I think Don is exactly right on that. | 56 |
fomc | 1,995 | In terms of the funds rate, yes. What troubles me is going out the yield curve and making a general application. | 24 |
fomc | 1,995 | Or a long-term projection of the real overnight rate--in other words, what the funds rate is going to be three years or ten years from now. | 31 |
fomc | 1,995 | Sure. | 2 |
fomc | 1,995 | Governor Blinder. | 4 |
fomc | 1,995 | Don, I want to ask you a question that came up when I scribbled my notes last night, notes which were much less extensive than yours. I was thinking about the difference between the real Treasury bill rate, or any interest rate that really matters to somebody, and the real fed funds rate, which doesn't matter to anybod... | 119 |
fomc | 1,995 | Yes, but there are two differences. One is the taxation. Treasury bills aren't subject to state income tax. People often use a New York resident as the marginal holder, so it's a nontrivial tax rate like 10 percent. The second point is that one is the obligation of someone who hasn't defaulted--at least until a few wee... | 87 |
fomc | 1,995 | Yes. | 2 |
fomc | 1,995 | Different risk? | 3 |
fomc | 1,995 | Sure. | 2 |
fomc | 1,995 | Yes, but that goes the other way. | 9 |
fomc | 1,995 | No. | 2 |
fomc | 1,995 | Fed funds rates are higher than bill rates because banks are riskier than the government. | 17 |
fomc | 1,995 | I am sorry. Am I right that the average gap over a very long time is in the range of 75 basis points with fed funds higher? | 30 |
fomc | 1,995 | That's too high. | 4 |
fomc | 1,995 | That sounds too high to me as well. Dave is saying 50 basis points. In the Financial Indicators package there is a one-year real funds rate; I don't know whether that's helpful in terms of the point you are getting at. | 47 |
fomc | 1,995 | He's talking about the two nominal effective yield curves? | 10 |
fomc | 1,995 | Yes. The difference is about 30 basis points now and it looks like the average may be about 50 to 75 basis points. It was low for a long time. | 36 |
fomc | 1,995 | What I was getting at is this: On the question of the real rate relative to historic averages, I think you get a little stronger case that it's on the high side if you look at, say, Treasury bills. | 44 |
fomc | 1,995 | Treasury bills? | 4 |
fomc | 1,995 | I think that's more correct than if you look at funds. | 12 |
fomc | 1,995 | I will have it plotted and distributed to the Committee. | 11 |
fomc | 1,995 | Anything else? At the last meeting and at the Humphrey-Hawkins testimony, as Governor Yellen suggested, I indicated that the maximum risk of a short-term recession was probably past. Indeed, the data that have emerged since then have increased the probability that the risks of recession have eased. A significant part o... | 1,623 |
fomc | 1,995 | Mr. Chairman, I support your policy proposal. | 10 |
fomc | 1,995 | Governor Lindsey. | 3 |
fomc | 1,995 | I support your policy proposal. | 6 |
fomc | 1,995 | Vice Chairman. | 3 |
fomc | 1,995 | As do I, Mr. Chairman. | 8 |
fomc | 1,995 | Governor Kelley. | 3 |
fomc | 1,995 | As do I, Mr. Chairman. | 8 |
fomc | 1,995 | President Minehan. | 4 |
fomc | 1,995 | As do I, Mr. Chairman. | 8 |
fomc | 1,995 | President Boehne. | 5 |
fomc | 1,995 | I support your proposal. | 5 |
fomc | 1,995 | President Forrestal. | 4 |
fomc | 1,995 | Ditto, Mr. Chairman. | 7 |
fomc | 1,995 | President Parry. | 4 |
fomc | 1,995 | The same. | 3 |
fomc | 1,995 | President Melzer. | 4 |
fomc | 1,995 | I support it, Alan. | 6 |
fomc | 1,995 | President Stern. | 3 |
fomc | 1,995 | I support it as well. | 6 |
fomc | 1,995 | President Broaddus. | 5 |
fomc | 1,995 | Me, too. | 4 |
fomc | 1,995 | President Jordan. | 3 |
fomc | 1,995 | I agree. | 3 |
fomc | 1,995 | Governor Phillips. | 3 |
fomc | 1,995 | I also. | 3 |
fomc | 1,995 | Governor Yellen. | 4 |
fomc | 1,995 | I support your proposal, too. | 7 |
fomc | 1,995 | President Moskow. | 4 |
fomc | 1,995 | I support it, Mr. Chairman. | 8 |
fomc | 1,995 | Governor Blinder. | 4 |
fomc | 1,995 | So do I. | 4 |
fomc | 1,995 | Have I run out of people? We'll have lunch earlier than usual! [Laughter] | 18 |
fomc | 1,995 | It's those sharks! | 4 |
fomc | 1,995 | Why don't you read the relevant language? | 8 |
fomc | 1,995 | I'll be reading from page 14 in the Bluebook: "In the implementation of policy for the immediate future, the Committee seeks to maintain the existing degree of pressure on reserve positions. In the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful con... | 109 |
fomc | 1,995 | Call the roll. | 4 |
fomc | 1,995 | Chairman Greenspan. Yes Vice Chairman McDonough Yes Governor Blinder Yes President Hoenig Yes Governor Kelley Yes Governor Lindsey Yes President Melzer Yes President Minehan Yes President Moskow Yes Governor Phillips Yes Governor Yellen Yes | 45 |
fomc | 1,995 | Our next meeting is on September 26 and I think we'll have a very interesting meeting. We adjourn for lunch. | 24 |
fomc | 1,995 | Would somebody like to move approval of the minutes? | 10 |
fomc | 1,995 | So move. | 3 |
fomc | 1,995 | Second. | 2 |
fomc | 1,995 | Without objection. Mr. Fisher, please. | 9 |
fomc | 1,995 | Thank you. Before permitting myself to take advantage of the new high-tech toys in the ceiling and because of the number of topics I need to cover, I thought I would try to exhaust the potential of older technologies. Thus, you should find an outline of my remarks on the table in front of you together with a single pag... | 75 |
fomc | 1,995 | Questions for Peter? | 4 |
fomc | 1,995 | There seems to be a lot of movement into Swiss francs, particularly by the Germans. Is there a general search in Europe for--I hate to use the words--a "safe haven," or what is it? | 43 |
fomc | 1,995 | Yes. Beginning in the spring and continuing over the summer, the German banking community seemed to awake to the possibility of capturing some of the flows by placing them in Swiss investments. This coincided with some revelations about the use of Luxembourg accounts by Germans for tax avoidance. So, there was a double... | 165 |
fomc | 1,995 | Are they actually going to their local Deutschebank to buy Swiss franc money market funds or whatever it might be? | 22 |
fomc | 1,995 | Yes, precisely things like that. | 7 |
fomc | 1,995 | There have been long articles in various German newspapers about the advantages of this kind of operation--newspapers such as the Frankfurter Allegemeine Zeitung and the Suddendeutsche Zeitung. The Swiss are understandably somewhat unhappy since they are just sitting there like any other emerging market, if I may put i... | 67 |
fomc | 1,995 | I failed to mention that the Swiss lowered their rates and saw their currency keep appreciating last week. | 19 |
fomc | 1,995 | How long have they been reducing their rates? | 9 |
fomc | 1,995 | They are down to 2 percent on their discount rate. | 12 |
fomc | 1,995 | Governor Phillips. | 3 |
fomc | 1,995 | Would the kinds of operational changes that you are contemplating, or working on, require legislative authorizations? | 20 |
fomc | 1,995 | In the implicit division of labor between Don Kohn and myself, I am working on issues that would not involve legislative changes. There are questions about possible changes in reserve requirements that might involve new legislation, and Don may be better placed to talk about those. At the Desk, we are looking at some v... | 142 |
fomc | 1,995 | If the Board wanted to go to a system of low, broadly based reserve requirements, that would require legislative changes. It is one of the options we are looking at. Obviously, if you wanted to pay interest on reserves, that would require legislative changes. It may be a little late for that. Legislative changes also w... | 144 |
fomc | 1,995 | Do you think that the kinds of changes that you are looking at would reduce the propensity of banks to develop sweep arrangements, or do you think those are with us anyway and have to be factored in? | 41 |
fomc | 1,995 | At this point I tend toward the latter view. If we were able to pay a market rate of interest on reserves, that would remove the incentive for sweeps. In that event, the current sweep arrangements might be undone, but it would be very hard to get the legislative authority in the current budget environment. The other ap... | 84 |
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