Source stringclasses 1
value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
|---|---|---|---|
fomc | 1,997 | Yes, exactly. I probably am asking the same question that you were posing: What do we do with monetary policy when there is no inflation but asset prices are booming? | 34 |
fomc | 1,997 | That is the question that I raised in a speech just before the sentence in which I expressed concern about how we will know when we encounter irrational exuberance. | 31 |
fomc | 1,997 | Yes, in your AEI speech. | 8 |
fomc | 1,997 | We have not been able to address that issue because I don't think we know how to handle a problem where we have one instrument and conflicting goals. What do we do? What should the Japanese have done when confronted with a very benign product price environment and rapidly escalating asset prices? | 55 |
fomc | 1,997 | Hindsight tells us to prick the bubble sooner, but how does foresight tell us we have a bubble? | 22 |
fomc | 1,997 | That was the context of that speech, and the state of my knowledge, at least, has not gone beyond that. I do not know what to do. | 32 |
fomc | 1,997 | It had some success. | 5 |
fomc | 1,997 | Temporarily. President Moskow. | 8 |
fomc | 1,997 | Mr. Chairman, I accept your recommendation. I was very interested in your analysis of inventories, and I hope you will distribute your comments to the Committee so we can look at it more carefully. | 39 |
fomc | 1,997 | Certainly. Does anybody else want to say anything? Okay, would you read the directive again. [Laughter] | 23 |
fomc | 1,997 | I will be reading from page 13 of the Bluebook, and then coming back to page 12 for the last sentence. The first sentence, then, is under the "New Alternative" heading on page 13: "In the implementation of policy for the immediate future, the Committee seeks conditions in reserve markets consistent with maintaining the... | 201 |
fomc | 1,997 | Call the roll. | 4 |
fomc | 1,997 | Chairman Greenspan Yes Vice Chairman McDonough Yes President Broaddus Yes President Guynn Yes Governor Kelley Yes Governor Meyer Yes President Moskow Yes President Parry Yes Governor Phillips Yes Governor Rivlin Yes th | 42 |
fomc | 1,997 | The next meeting as you all know is the 30 of September. There are no topics for the luncheon today because Bob McTeer has a 2:15 p.m. flight. [Laughter] | 44 |
fomc | 1,997 | Good morning, everyone. Would somebody like to move approval of the minutes for the August 19 meeting? | 21 |
fomc | 1,997 | So move. | 3 |
fomc | 1,997 | Without objection. Peter Fisher. | 6 |
fomc | 1,997 | Thank you, Mr. Chairman. I will be referring to the four pages of colored charts in front of you under the Class II cover. 1On the first page are current 3-month deposit rates and 3-, 6-, and 9-month forward, 3-month deposit rates that for the United States are shown in red, for Germany in blue, and for Japan in green.... | 2,098 |
fomc | 1,997 | Questions for Peter? | 4 |
fomc | 1,997 | A quick question, Peter. It seems to me that our key concern about intra-day funds rate volatility would be the possibility that we would give the wrong signal to markets. I have not had the sense that anything like that has been happening lately, but you may have a different impression. | 57 |
fomc | 1,997 | No, I do not. I think the market understands as well as any of us the implications of low operating balances and how they may foster market volatility on some days. So, no, I don't think such volatility has had any effect on policy expectations. Don and I have worried that it might at some point. I don't want to make t... | 110 |
fomc | 1,997 | Peter, the numbers look quite good in terms of confirming your hypothesis about the rate objectives of the Bundesbank and the Bank of Italy. I had always thought that the Bank of Italy, specifically the Italian government, would have been far more interested in having their rates converge with the German rates at the b... | 183 |
fomc | 1,997 | I have spoken with people at the Bank of Italy, the Bank of France, and some other European central banks. For the Italians, there is a hierarchy of objectives. Getting into EMU is the first, the second, and the third objective! So, I think they are prepared to pay some price for EMU membership. If they cannot get thei... | 475 |
fomc | 1,997 | Yes. Any other questions for Peter? If not, would someone like to move to ratify the domestic operations? | 23 |
fomc | 1,997 | So move. | 3 |
fomc | 1,997 | Without objection. We turn now to Mike Prell. | 11 |
fomc | 1,997 | Thank you, Mr. Chairman. It would not surprise me if many of you found the tale of the staff forecast in the Greenbook more tortuous than usual. Preparing the forecast and then writing it up proved to be a considerable struggle for us this time. Perhaps we engaged in more soul-searching than was really required, but we... | 1,863 |
fomc | 1,997 | Questions for Mike? | 4 |
fomc | 1,997 | I think Mike's oral presentation adds a good deal of clarity to the ideas behind the Greenbook forecast. There are a couple of things there, however, that strike me as somewhat inconsistent, and perhaps you could clarify this for me or the rest of us. We have a rather high real interest rate now and that rate makes car... | 289 |
fomc | 1,997 | Those are very interesting questions. Perhaps the relatively high real rate of interest in recent years, particularly if it is measured in terms of the prices of goods, say the PPI, may have something to do with why we see a downtrend in inventory-sales ratios. Another factor, of course, is the better information syste... | 547 |
fomc | 1,997 | President Moskow. | 4 |
fomc | 1,997 | I think you answered my question in part, Mike. It also relates to the Greenbook assumptions of a one hundred basis point tightening in 1998 and a 20 percent stock market correction. My specific question was whether you are assuming that same stock market correction in the "no change" scenario. More generally, is the s... | 76 |
fomc | 1,997 | The "no change" scenario that we have included in that model simulation clearly would imply a higher level of stock prices than in our baseline forecast. That better stock market performance results from the strength of the economy that helps to sustain profits, and it works through the discount factor in stock price v... | 154 |
fomc | 1,997 | Thank you. | 3 |
fomc | 1,997 | President Parry. | 4 |
fomc | 1,997 | Mike, the ECI forecast in the Greenbook has an increase of just a couple of tenths over the forecast period. There is reference in the Greenbook to the fact that the increasing role of bonuses and other incentive payments may be having some influence in moderating measured increases in employment costs. You mentioned i... | 161 |
fomc | 1,997 | Let me mention a couple of things: One, we did build in only mild accelerations in wages and salaries and in total benefits, and we incorporated a rather modest upturn in the cost of medical benefits relative to some of the stories we have heard. To some extent, we have to consider whether we are looking at the gross i... | 423 |
fomc | 1,997 | Thank you. | 3 |
fomc | 1,997 | President Jordan. | 3 |
fomc | 1,997 | Thank you. I always pay special attention to September Greenbooks because they give us that extra year in the forecast horizon to think about. | 27 |
fomc | 1,997 | I might just remark that since this is the first time we have formally done a forecast for 1999, it probably is a little shakier than it might otherwise be. | 35 |
fomc | 1,997 | But September forecasts are nonetheless useful. A year ago in September, I looked at the projections and noted that nominal spending was increasing at a rate of around 4-1/2 percent and not much progress was being made in the direction of reduced growth. This forecast pulls down nominal spending growth by a full percen... | 296 |
fomc | 1,997 | I do not have a model simulation in my pocket to give you a quantitative answer to that. I think that a series of policy moves that raised the federal funds rate 100 basis points by next March instead of one that only started to raise the funds rate next March would probably lead to circumstances that would encourage t... | 211 |
fomc | 1,997 | So your view is not that we do less in total, but that we would start to reverse it sooner? | 22 |
fomc | 1,997 | As a first approximation, I would conceive of that as a more likely alternative in terms of nipping in the bud what we think is an incipient pickup in inflation. But we recognize, harking back to President McDonough's remark, that the implied real interest rate at the short end would be fairly high with a nominal feder... | 120 |
fomc | 1,997 | President Guynn. | 4 |
fomc | 1,997 | Thank you, Jerry just asked the question I wanted to pose. | 13 |
fomc | 1,997 | Mike, the data of the last couple of months clearly have been far stronger, especially in the manufacturing area, yet commodity prices have eased. Are we being put in a position where, for forecast and model purposes, we are using wages and prices as exogenous variables? | 54 |
fomc | 1,997 | I'm not sure I understand that thought. | 8 |
fomc | 1,997 | Let me take a step back. If you were to take the type of macro environment we are looking at and you were trying to make up for a shortfall from your earlier expectations, the numbers in such a forecast would, I suspect, be far stronger than the ones that you have. So, in that regard the add factors are very dominant e... | 105 |
fomc | 1,997 | I'm not sure I conceive of it as exogenous. In a sense we are letting bygones be bygones and not anticipating that the favorable inflation surprises have created some pent-up inflationary pressure that is going to burst forth in the future. I am impressed by recent commodity market developments. I looked at the charts ... | 303 |
fomc | 1,997 | If you are making the assumption that your model's historical structure and its coefficients are essentially correct and you are letting bygones be bygones, you will get a specific numerical forecast which follows from those two assumptions. | 42 |
fomc | 1,997 | We are in a sense modifying some of the conditions in that model. When we look at cycles historically, we see that capacity utilization has tended to move up as unemployment has moved down. It is very hard to discern econometrically a separate role for industrial capacity utilization as a measure of the underlying infl... | 88 |
fomc | 1,997 | I gather that is true with the manufacturing unemployment rate as well? | 13 |
fomc | 1,997 | Probably. Those industry unemployment rates are a shaky proposition. I must say I have not really looked at that. | 22 |
fomc | 1,997 | The last time we looked at this issue was a year or so ago, and we saw the same problem for the total unemployment rate. It was not a sectoral phenomenon; it was a divergence between the labor market and the facilities market. | 48 |
fomc | 1,997 | Since manufacturers cannot produce without workers, the labor market is still relevant here. We do hear, and there were some Beigebook comments, that at least in some instances manufacturers were finding that they had to raise their wages in order to attract and retain the workers they needed. But the system seems to b... | 110 |
fomc | 1,997 | President Minehan. | 4 |
fomc | 1,997 | As Jack mentioned, most of the good questions already have been asked. Mike, I know we have had an asymmetric risk picture in most of the recent Greenbook forecasts and certainly in the way the Committee has approached setting its directives. Would you say that the risks incorporated in this forecast are larger than th... | 87 |
fomc | 1,997 | One of the risks we repeatedly have pointed to and then last time said it might not be such an asymmetric risk was the role of the stock market and the implications for consumption. As you may recall, the revised national income accounts that we received after the August meeting showed that the saving rate had fallen s... | 391 |
fomc | 1,997 | In your alternate forecast scenario that involves no further change in the federal funds rate, I wonder about that 2.6 percent GDP growth figure for 1998 which occurs without the 100 basis point tightening. I think there is a lot of optimism in that forecast that growth will slow on its own. Now, granted that this is n... | 112 |
fomc | 1,997 | President McTeer. | 5 |
fomc | 1,997 | Mike said a moment ago that he did not think that manufacturers could produce without workers. I have heard that the factory of the future will only have a man and a dog. The man is there to feed the dog. The dog is there to keep the man from touching the equipment. [Laughter] | 61 |
fomc | 1,997 | Well, we don't have to worry about our educational system! | 12 |
fomc | 1,997 | I have heard that joke specifically pertaining to chip plants, an industry joke. | 15 |
fomc | 1,997 | It is called a high-tech shaggy dog story. Who would like to start off the Committee discussion? President Broaddus. | 26 |
fomc | 1,997 | Obviously the latest data, particularly including the latest inflation report, are very favorable. Maybe it is time for me to stop worrying and join the celebration. | 30 |
fomc | 1,997 | Don't you dare do that! [Laughter] | 10 |
fomc | 1,997 | You need not worry. I'm still nervous, and I get the sense from the questions and comments this morning that the staff and other people are as well. I am still nervous partly because of what I hear in my District and because I have a sense that the foundation of all the good news lately may be fragile. As far as our Di... | 1,053 |
fomc | 1,997 | President Parry. | 4 |
fomc | 1,997 | Mr. Chairman, economic growth has continued to display strength in the Twelfth District in recent months. Payroll employment grew by almost 3 percent at an annual rate this summer. The number of jobs expanded briskly in the construction, real estate, and local government sectors in the District states that have fast-gr... | 636 |
fomc | 1,997 | President Moskow. | 4 |
fomc | 1,997 | Thank you, Mr. Chairman. Economic conditions in the Seventh District are quite similar to those on which I reported at our August meeting. Our regional economy continues to expand at a moderate rate that is slower than the nation's, in part due to labor supply constraints. I met with our Advisory Councils on Agricultur... | 1,025 |
fomc | 1,997 | Mr. Chairman, may I interrupt for a moment? I would like to remind the members that in this discussion of what happens if the Committee tightens sooner than is assumed in the Greenbook forecast, the tighter alternative in the Greenbook is a first approximation. It is the sort of scenario where the Committee starts the ... | 195 |
fomc | 1,997 | What worries me is that we may well need an actual turn in the inflation rate to get a sense of what this process is all about because we are still guessing. If we go back six months, even though we were then seeing falling inflation, the presumption that it would continue to fall over the ensuing six months would prob... | 101 |
fomc | 1,997 | I don't question that. I just felt that I probably overlooked a piece of information that might have been a more direct answer to your question. | 28 |
fomc | 1,997 | President McTeer. | 5 |
fomc | 1,997 | The Eleventh District economy continues to do very well, which I regard as a good thing. The Dallas District was cited in the Beigebook summary as having increased retail sales and some modest upward pressure on prices and wages in the services and retail sectors. Manufacturing activity has picked up in our District si... | 514 |
fomc | 1,997 | I did not quite get the difference between the 33,000 and 300,000. What is the 33,000 again? | 28 |
fomc | 1,997 | The 33,000 is the increase in U.S. manufacturing employment since the end of 1994. | 22 |
fomc | 1,997 | In Texas? | 3 |
fomc | 1,997 | No, I think it is for the nation. | 10 |
fomc | 1,997 | Okay. | 2 |
fomc | 1,997 | And the 300,000 is the increase in maquiladora manufacturing employment over the same period. If we rank the states in terms of manufacturing employment, California is first, Ohio is next, then Texas, Illinois, Michigan, Pennsylvania and New York. The maquiladoras would rank eighth, coming in ahead of North Carolina an... | 695 |
fomc | 1,997 | President Minehan. | 4 |
fomc | 1,997 | Mr. Chairman, the New England economy continues to grow steadily at roughly the national rate. The regional unemployment rate in August was about 4.3 percent, and initial unemployment claims continue to trend down. Labor force participation rates are rising in response to the attractive employment situation. Most of ou... | 1,297 |
fomc | 1,997 | President Jordan. | 3 |
fomc | 1,997 | Thank you. In addition to our usual advisory council meetings and other contacts, we had a board of directors meeting earlier this month with all the directors from our three offices and, in conjunction with that, a breakfast with some leading manufacturing CEOs to talk about innovations, greater efficiencies, and new ... | 1,679 |
fomc | 1,997 | President Hoenig. | 4 |
fomc | 1,997 | Thank you, Mr. Chairman. The Tenth District economy continues strong. Our manufacturing sector is still operating at very high levels of capacity. District retailers are again experiencing good sales after a slowdown this summer. The energy sector is strong. The District farm economy is in uniformly good condition; tha... | 601 |
fomc | 1,997 | President Boehne. | 5 |
fomc | 1,997 | The economy in the Philadelphia District currently is performing much as it has in recent months. It features steady growth at a moderate pace, tight labor markets, and little or no upward pressure on prices. In commercial real estate, vacancy rates are low and rents are rising. More capacity is in train, however, and ... | 445 |
fomc | 1,997 | I should say that the word I used to describe the Greenbook forecast was "tortuous." [Laughter] I hope we did not torture the readers. | 33 |
fomc | 1,997 | President Melzer. | 4 |
fomc | 1,997 | Thanks, Alan. I have little new to report on the Eighth District economy. On balance, economic performance has improved in the third quarter, as we hear has occurred in other districts. Sales exceeded the expectations of many businesses. District labor markets are stretched to the limit in many areas, and that is putti... | 782 |
fomc | 1,997 | President Stem. | 3 |
fomc | 1,997 | Thank you. The Ninth District economy remains quite healthy, and I have asked myself what has changed in our area that might provide a clue as to the future performance of the national economy. The short answer to that is "not much," but let me comment on a few aspects of the situation in any event. District agricultur... | 583 |
fomc | 1,997 | President Guynn. | 4 |
fomc | 1,997 | Thank you, Mr. Chairman. Our Sixth District economy looks much the way it did six weeks ago, and District activity finished the summer at a pace that looks much the same as that for the nation. The regionally important tourism and hospitality industries could not be stronger, and this is despite the added capacity that... | 895 |
fomc | 1,997 | Vice Chairman. | 3 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.