Source stringclasses 1
value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
|---|---|---|---|
fomc | 1,997 | Did they sniff at that? | 6 |
fomc | 1,997 | A little, but it is a language they understand. | 11 |
fomc | 1,997 | I think that, as a practical matter, the dealers who decided they did not want to behave according to Peter's desires would probably decide they did not want to be primary dealers. They would be very unlikely to bring attention to themselves by suing us. That would be saying, "I have been deemed unacceptable, and I wan... | 73 |
fomc | 1,997 | President Broaddus. | 5 |
fomc | 1,997 | Peter, on the domestic bond markets, the yield spread between the regular 10-year Treasury note and the inflation-indexed bond has diminished a little over the intermeeting period. At first glance, that might normally be expected to imply a drop in longer-term inflation expectations. But I am wondering whether in the f... | 93 |
fomc | 1,997 | Yes, I think that is right. I do not want to put too fine a point on it, but I think most people in the market understand that. I don't think people have been making too much of the shift in that spread. I agree with you. | 53 |
fomc | 1,997 | It is true that the indexed bond went down several basis points, particularly on the day of the sharp market break. So, I think there was a flight to both of the securities. It had been our interpretation as well, at least for a while, that if investors were going to get into something liquid, they would choose nominal... | 207 |
fomc | 1,997 | President Melzer. | 4 |
fomc | 1,997 | Thanks, Alan. Peter, on the issue of publishing the standard deviation data, I have no objection to providing that additional information. I think it is probably a good idea. I guess I would be concerned if I thought the Desk were going to use those data as a measure of its performance and, specifically, if the Desk we... | 129 |
fomc | 1,997 | I share your view about that. We have developed this measurement for slightly different purposes. I find it very useful in talking to you about our operations, and I think it may help you to judge what we are doing. That's how I think of the standard deviation. As is illustrated in some of those charts, there will be d... | 308 |
fomc | 1,997 | Both the Desk and the Board staff have been using the standard deviation data for analytical purposes to see whether the character of the market is changing in any way as reserve balances decline. There is no reason why the market cannot have the same data for analytical purposes. | 51 |
fomc | 1,997 | President Stem. | 3 |
fomc | 1,997 | Peter, I have a couple of questions on the primary dealer situation. Is it your impression that the performance of some of the dealers has deteriorated over time? Secondly, what do we know about the profitability of their current operations? | 46 |
fomc | 1,997 | I will respond to the second question first. The Desk collected profitability data from the dealers for a long time. When I became Manager, I looked at that and discontinued it. What we were getting was apples and oranges and kumquats. We had no ability to insure that we were getting apples compared to apples from the ... | 115 |
fomc | 1,997 | I assume that you get a sense of what is going on by talking to them. | 17 |
fomc | 1,997 | Yes, and I want to distinguish two sorts of information that we get from the dealers. From our conversations with the dealers, it is clear that there is some disparity among the firms. There are some firms that are doing rather well and others that are not. What also comes out in our conversations is that the nature of... | 246 |
fomc | 1,997 | President Parry. | 4 |
fomc | 1,997 | Peter, we do not have primary regulatory responsibility for the parents of some of the primary dealers. Do we have a dialogue with the primary dealers about century date change compliance and is it an issue? | 39 |
fomc | 1,997 | There are numerous efforts. Bill McDonough might be able to say more about his contacts in New York with the Securities Industry Association. The Federal Reserve has been talking about those issues in many ways with the securities industry generally. I have not singled out the dealer community because there are so many... | 65 |
fomc | 1,997 | Also, there is the issue of foreign banks, which I think has become more of an issue in recent months. | 23 |
fomc | 1,997 | Yes. | 2 |
fomc | 1,997 | Within the limits of not in effect becoming their supervisors, which would be inappropriate, we pay as much attention as we can and gather as much knowledge as possible about the activities of the securities firms and perhaps even more so of the foreign banks in our market because we do supervise them. | 56 |
fomc | 1,997 | Right. | 2 |
fomc | 1,997 | There is a general move at securities firms in the direction of policing their activities better in order to run their businesses more soundly. Needless to say, we have encouraged that effort and applaud it. Some of the time we can get a point across in a speech that shows an interest in how well they are behaving them... | 72 |
fomc | 1,997 | Would it be appropriate to have a discussion with the primary dealers regarding their handling of century date compliance just as we would with banking institutions? | 27 |
fomc | 1,997 | On that issue, we are trying to work with the Securities Industry Association and the Bond Market Association. Again, we do not want to become their regulator as primary dealers. As securities firms, we are trying to make sure we are talking to them, but it is a little awkward, qua primary dealer, to discuss the centur... | 71 |
fomc | 1,997 | On century date change, I meet one-on-one two to three times a year with the heads of insurance companies and securities firms as well as major banks. At those meetings, we go through all the business concerns on their side and our side. For the last year, a piece of that agenda has always been century date change. My ... | 146 |
fomc | 1,997 | Okay. | 2 |
fomc | 1,997 | You may know that during the annual meetings in Hong Kong, the Institute of International Finance had a very well attended gathering. I was asked to give the primary speech and I dedicated all of it to the century date change issue. | 45 |
fomc | 1,997 | Any other questions? Would somebody like to move to ratify domestic Desk transactions since the last meeting? | 20 |
fomc | 1,997 | So move, Mr. Chairman. | 7 |
fomc | 1,997 | Without objection. Would somebody like to move to give Peter Fisher some additional intermeeting leeway? | 19 |
fomc | 1,997 | Move approval to increase the leeway to $12 billion. | 12 |
fomc | 1,997 | Without objection. Peter, would you move on to the next item on the swap line renewals? | 20 |
fomc | 1,997 | On the last page of my package, there is a list of our existing swap lines, a note on the Treasury's two swap lines, and the new maturity date if we go ahead with the normal renewal process. This is the time of year I ask you for authority to begin that process, which involves a lot of exchanges of telexes and telephon... | 286 |
fomc | 1,997 | Servants? | 3 |
fomc | 1,997 | Yes, humble! | 4 |
fomc | 1,997 | It is also intended to include "and obedient." Move approval of the swap line renewals, Mr. Chairman. | 23 |
fomc | 1,997 | Mr. Chairman, I think my concerns about foreign exchange operations are well known, and I'm not going to repeat all the arguments I have made earlier. I am uncomfortable with foreign exchange operations for the reasons that I have stated previously, and I see the swap lines as our instrument to implement those operatio... | 69 |
fomc | 1,997 | Any further comment? Is there a second to President McDonough's motion? | 16 |
fomc | 1,997 | Second. | 2 |
fomc | 1,997 | All in favor say "Aye." SEVERAL. Aye. | 15 |
fomc | 1,997 | Opposed? | 3 |
fomc | 1,997 | No. | 2 |
fomc | 1,997 | Let's move on to the staff economic reports with Messrs. Prell and Truman. | 17 |
fomc | 1,997 | Thank you, Mr. Chairman. I want to offer just a few comments before yielding to Ted for his remarks on the recent turbulence in the international economy and its implications for the U.S. outlook. I think it's pretty obvious that we don't share the view that the United States is going to be sucked into a deflationary w... | 1,058 |
fomc | 1,997 | I thought it would be useful to say a few words about how we have tried, in preparing the Greenbook forecast, to take account of the recent turbulence in the international economic and financial environment. I would note at the start that our assessment is very much a work in progress; in particular, the assumptions, e... | 1,544 |
fomc | 1,997 | What has been happening in the last couple of years to the statistical discrepancy in the world current account balance? | 21 |
fomc | 1,997 | It has not moved much. It is still a very big negative or positive depending upon how you want to think about it. | 25 |
fomc | 1,997 | Is it still $100 billion? | 7 |
fomc | 1,997 | When we did this calculation, we held that unchanged. We forced the adjustments to go elsewhere rather than into the statistical discrepancy. | 25 |
fomc | 1,997 | I noticed in the most recent labor force data that the participation rate declined. We usually would expect it to rise in the context of a sharp increase in economic growth. I gather from the underlying data that there has been a significant increase in school enrollments. One would presume that is occurring because of... | 157 |
fomc | 1,997 | We have looked at the movements in the labor force in some detail. Basically, in this latest forecast we backed off from our previous expectation of a significant rise partly because the incoming data were not moving that way. What we have seen since the spike in March is a rather broad-based decline involving adult ma... | 196 |
fomc | 1,997 | What is the effect on the productivity numbers of the upward BLS revision of payroll employment from the annual survey? | 22 |
fomc | 1,997 | All other things equal, it will tend to lower productivity growth over the period in which they wedge in this increase. We are talking about a 0.1 or 0.2 reduction. | 39 |
fomc | 1,997 | Isn't the BLS revision something like 500,000 workers? | 14 |
fomc | 1,997 | I think it was 475,000. If we assess the effect on productivity growth in terms of gauging the trend over a period of time, it would not be quite so large. | 38 |
fomc | 1,997 | It will affect the historical data, the 1996 numbers, but are you suggesting that it will have little effect on the outlook? | 27 |
fomc | 1,997 | They will carry something through as well, but there is also the possibility that by the time we get to the middle of next year other data will have changed too, perhaps on the output side. | 39 |
fomc | 1,997 | Is there a tendency for that to happen when BEA does its annual revisions? | 16 |
fomc | 1,997 | That is a very interesting question for which I do not have an answer. It is something that we ought to look into. | 25 |
fomc | 1,997 | If it were to show up, it probably would be as an additional increase in the statistical discrepancy. There is no evidence that statistical discrepancies revise back toward zero when the annual revisions are made. So, you could not necessarily use the revision to forecast more GDP, but it certainly is a logical possibi... | 60 |
fomc | 1,997 | It certainly would make BEA look harder. | 9 |
fomc | 1,997 | Indeed. I think they will undertake a more careful review of the discrepancy between the income side data and the product side data, and to the extent that they have some discretion, they might emphasize it that way. | 42 |
fomc | 1,997 | As I understand it, the only data we are really dealing with are the revised employment numbers. They will feed that through in estimating total hours, but one does need to look at the income data themselves. | 41 |
fomc | 1,997 | President Hoenig. | 4 |
fomc | 1,997 | Mike, I had a question in reading the Greenbook. As you look out beyond this year, you are forecasting a slowing in GDP growth, and even though you have reduced the rate of increase in inflation, the inflation trend is still positive. As the Greenbook explains the surrounding circumstances, it seems that the primary re... | 89 |
fomc | 1,997 | That is a part of the story. We view resource pressures at this point, particularly in the labor market, as being strong enough to produce some ongoing acceleration in prices. The fact that productivity growth in the industrial sector is as rapid as it is suggests to us that, going forward, we are going to have a reaso... | 186 |
fomc | 1,997 | Even with the GDP numbers coming down markedly? | 9 |
fomc | 1,997 | One might think that there will be something of a so-called speed effect as we move into 1999. The other element, though it is a small and uncertain factor, does work in the direction of tending to raise inflation. It has to do with the fact that we have been benefiting significantly over the past couple of years from ... | 95 |
fomc | 1,997 | President Moskow. | 4 |
fomc | 1,997 | Mike, in the corporate profit area, I wonder if you could elaborate a bit on the basis for the Greenbook's assumption that corporate profit growth slows so significantly by early 1998. The labor costs do not seem to accelerate dramatically in this period, and, of course, if profits come in higher than you anticipate in... | 84 |
fomc | 1,997 | The numbers do conform arithmetically with the behavior of compensation and unit labor costs, but there are other factors that play a role such as movements in interest costs, foreign earnings, and so on. In the short run, we probably will have our greatest hit to foreign earnings from the problems in Asia in particula... | 318 |
fomc | 1,997 | Thank you. | 3 |
fomc | 1,997 | President Parry. | 4 |
fomc | 1,997 | In the Greenbook forecast, the funds rate is kept constant through this quarter and then begins to move up, rising 75 basis points by the middle of next year. Was there any thought as to how sensitive the forecast might be to this assumption, in view of recent developments in Asia? In particular, if this path were emba... | 106 |
fomc | 1,997 | I will call on Ted to comment regarding how he thinks other markets will respond. This is a question that President Jordan asked at the last meeting, and in retrospect I thought my answer may not have hit on one point that logically would be potentially significant in our thinking about the forecast. That point is that... | 199 |
fomc | 1,997 | It seems to me that two or three points could be made. One is that there is a sense in which all of this volatility in foreign markets has been associated with some moves toward tighter policies, as Peter has pointed out. We have had the Canadian moves, the British moves, the German moves, and although Japanese moves h... | 284 |
fomc | 1,997 | I would only add that it is always hard to predict how markets are going to react to a policy move, but if you do something unexpected in a skittish and nervous market, it would seem to me that predicting the outcome is much more difficult in that case. The chances of outlier kinds of responses are somewhat higher. | 66 |
fomc | 1,997 | Governor Rivlin. | 4 |
fomc | 1,997 | This is a version of Tom Hoenig's question. I was quite surprised by the projected falloff in productivity growth in your forecast for 1998. We have had a gratifying improvement now for four years, and you reflect that experience in your estimate of increased trend growth, but then you have a big drop in 1998 to an inc... | 96 |
fomc | 1,997 | The basic thesis here is that we have had a spurt. We think the improvement in trend is an element in that, but we also think that, in part, the acceleration of output has lifted the growth in productivity to substantially above the trend line that we would draw. As the economy decelerates, we would anticipate a moveme... | 82 |
fomc | 1,997 | It's not just a movement toward the trend line; it falls below. | 14 |
fomc | 1,997 | No. Think of the productivity trend as a line that is rising and current productivity as moving above the line. The two lines then tend to converge, with actual productivity converging to trend from above. Now, during past business cycles, this has occurred irregularly. Certainly, it has occurred at the end of cyclical... | 214 |
fomc | 1,997 | President Guynn. | 4 |
fomc | 1,997 | Mike, I may have misread the analysis in the Greenbook, but I got the sense that you placed a great deal more importance on the wealth effect in your current forecast for household consumption. I compared that analysis to your earlier assessment of how much the wealth effect would affect spending as the stock market ro... | 135 |
fomc | 1,997 | Perhaps because we did not include verbiage in that part of the Greenbook about a lot of other developments, it may have seemed that there was more focus on the wealth effect. Since the midyear revisions to the national income accounts that showed a decline in the saving rate, I think we have used essentially the same ... | 403 |
fomc | 1,997 | President Minehan. | 4 |
fomc | 1,997 | I want to go back to Ted's comment about whether or not the paper we got on the "worst case" scenario was really "worst" or "worse." I noticed that the paper still foresees some growth in 1998 for Korea, and I must say I am a little concerned that the impact of the Southeast Asian crisis on Japan may be more significan... | 115 |
fomc | 1,997 | There is always that problem, and that is why I made my last comment. You could always say that if growth is going to be marked down by 5 percentage points, why not mark it down by 6 percentage points? That is at one level. There is always some chance of a cumulative process, reminiscent of a lot of economic history. O... | 607 |
fomc | 1,997 | If you use that "worse" case scenario as a guess, is the impact a one-half percentage point reduction in our GDP growth over the next couple of years? | 34 |
fomc | 1,997 | It is a little more. | 6 |
fomc | 1,997 | Spread over 1998 and 1999? | 10 |
fomc | 1,997 | It is more like adding 0.2 to 0.5 in 1998 and 0.1 to 0.2 or 0.3 in 1999. I think that is the order of magnitude. There is always a question about multipliers in these exercises. Now, in fact, when we run these through, the ex post multipliers tend to be close to 1.0. It is not entirely clear to me whether that is becau... | 128 |
fomc | 1,997 | Apart from that, how does this scenario play out in terms of unemployment and downward impact on inflationary pressures? | 22 |
fomc | 1,997 | That goes to the question of global deflation. Perhaps Mike Prell and Don Kohn ought to answer this question, but my view is that the fundamental behavior of the U.S. economy has not changed so much in the last half dozen years that we can no longer analyze effects of this size through standard aggregate demand approac... | 200 |
fomc | 1,997 | There is a simple rule of thumb. One has to have a full-fledged scenario that indicates the circumstances in which, for example, this extra couple of tenths of GDP restraint might be occurring. If we just had a quarter percentage point more deceleration in GDP growth for two years, we would end up by Okun's Law with ab... | 161 |
fomc | 1,997 | As I looked at this analysis in relation to the scenarios at the end of the Greenbook, it seemed to me that the effects were somewhere between the baseline and the tighter scenario in terms of GDP growth. Remember that the tighter scenario in effect keeps inflation from rising. As I will say in my briefing later, it se... | 82 |
fomc | 1,997 | President Broaddus. | 5 |
fomc | 1,997 | Mike, I was struck by the fact that the projection for the ECI for next year is the same as the number for this year. I would like to get some sense about how comfortable you are with that projection because I believe it was made before we had the October jobs report. Also, we at our Bank get a lot of anecdotal informa... | 129 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.