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Recent FedSpeak Highlights

  • Ben Bernanke

    I'd say it would be more accurate to say we are looking for a bit more flexibility, given the uncertainties that we are facing and the risks that are occurring on both sides of our outlook.

    An additional point. We, in general, this is more technical, but we, in general, prefer not to give advance rate guidance, that is, not to tell the market we're going to do this, that and the other. Rather, it's better for the FOMC to describe our outlook and the risks that we see for the outlook and let the markets make their own determination about how to price assets. One aspect of this change has been to move away from forward rate guidance, which we view as being something that should be undertaken mostly under unusual circumstances.

    ...

    Our statement included a description both of the situation on the real side of the economy and on the inflation side and our sense was both, that the risks had increased on both sides, that the outlook for output was a bit weaker, as we indicated in our statement, but that, also, the inflation situation had become slightly riskier, as well. And so both sides of the mandate have -- are facing somewhat greater risks.

    From the Q&A session

     

    [ March 28, 2007 ]
  • Frederic Mishkin Looking to the medium term, I am less optimistic about the prospects for core PCE inflation to move much below 2 percent in the absence of a determined effort by monetary policy.

    [ March 23, 2007 ]

    If long-run expectations are in fact about 2 percent, where is actual inflation likely to be headed in the next year or two? While recognizing how embarrassingly wrong such prognostications often turn out to be, I think that we can be reasonably optimistic that core PCE inflation will gradually drift down from its latest twelve-month reading of 2-1/4 percent...

    Looking to the medium term, I am less optimistic about the prospects for core PCE inflation to move much below 2 percent in the absence of a determined effort by monetary policy. For the most part, this assessment--which I should stress is subject to considerable uncertainty--flows from my view that long-term expectations appear to be well anchored at a level not very far below the current rate of inflation. If so, a substantial further decline in inflation would require a shift in expectations, and such a shift could be difficult and time consuming to bring about, as I noted earlier.

  • Michael Moskow ...I still think that the underlying economic fundamentals are conducive to a pickup in growth as we move through 2007 and 2008.  So I am not prepared to significantly change my projections at this time.

    [ March 7, 2007 ]

    ...I still think that the underlying economic fundamentals are conducive to a pickup in growth as we move through 2007 and 2008.  So I am not prepared to significantly change my projections at this time.

  • Randall Kroszner"The outlook for the U.S. economy has not materially changed," Kroszner said during a question-and-answer session at a community banking conference in Washington. 

      "The financial markets seem to be working well and there seems to be sufficient liquidity in the system to respond to the rapid changes that have been occurring recently," Kroszner said, in a nod to recent sharp declines in Asian and U.S. equities markets.

    As reported by Dow Jones Newswires

    [ March 5, 2007 ]

    More From:

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    Source:

    http://www.federalreserve.gov/boarddocs/speeches/2007/200703052/

    Venue:

    American Community Bankers Government Affairs Conference
  • Kevin Warsh The U.S. economy continues to demonstrate extraordinary resilience, no doubt supported by the ability of financial markets to absorb substantial shocks.

    [ March 5, 2007 ]

    The U.S. economy continues to demonstrate extraordinary resilience, no doubt supported by the ability of financial markets to absorb substantial shocks. Financial markets have been buffeted by a number of significant events, including a spate of corporate accounting scandals, the bond rating downgrades of Ford Motor Company and General Motors Corporation to speculative-grade status, the failure of Refco, (at the time the largest broker on the Chicago Mercantile Exchange), and the imposition (and pullback) of capital controls in Thailand. But the effects on broader markets appear to have been remarkably contained. Even the episode last year involving the hedge fund, Amaranth, which accumulated losses of $6 billion in a few short weeks, seemingly had little impact beyond its direct stakeholders.

  • William Poole Recession, I guess in one sense, is always possible. I think the probability is not very high.

    [ March 2, 2007 ]

    Recession, I guess in one sense, is always possible. I think the probability is not very high. I think the probability is a little higher than it might have been two years ago. But the prevailing forecasts certainly do not include recession in the U.S. outlook.

    People who are forecasting a recession are decidedly a minority view at this time.

    More From:

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    Source:

    http://www.stlouisfed.org/news/speeches/2007/03_02_07.html

    Venue:

    Global Interdependence Center Abroad
  • Ben Bernanke My view is that taking all the new data into account, that there is really no material change in our expectations for the U.S. economy.

    [ February 28, 2007 ]

    I will say that the Federal Reserve, in collaboration with the president's working group, has been closely monitoring the markets. They seem to be working well, normally.

    We've also, of course, been closely monitoring the economy, looking at new data and trying to evaluate their implications for the forecast.

    And my view is that taking all the new data into account that there is really no material change in our expectations for the U.S. economy since I last reported to Congress a couple of weeks ago in the Humphrey-Hawkins hearings.

     ...We are looking for moderate growth in the U.S. economy going forward.  And I would add, parenthetically, that the downward revision of the fourth quarter GDP numbers we got this morning is actually more consistent with our overall view of the economy than were the original numbers.

    ...So we expect moderate growth going forward. We believe that if the housing sector begins to stabilize and if some of the inventory corrections that are still going on in manufacturing begin to be completed, that there's a reasonable possibility that we'll see some strengthening of the economy sometime during the middle of the year.

    During Q&A session.

  • Jeffrey Lacker I don't think policy is restrictive, and in fact I see that policy is, if anything, somewhat accommodative.

    [ February 27, 2007 ]

    I don't think policy is restrictive, and in fact I see that policy is, if anything, somewhat accommodative.

    In a Market News interview

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    Venue:

    Market News International Interview
  • Janet L. Yellen A key question for inflation going forward —and therefore, for monetary policy—is what happens if the drag from housing and autos disappears later this year? As I’ve stressed, with labor markets apparently somewhat tight, something else will need to slow to keep growth below potential.

    [ February 21, 2007 ]

    A key question for inflation going forward —and therefore, for monetary policy—is what happens if the drag from housing and autos disappears later this year? As I’ve stressed, with labor markets apparently somewhat tight, something else will need to slow to keep growth below potential.

    More From:

    See Also:

    Source:

    http://www.frbsf.org/news/speeches/2007/0221.html

    Venue:

    Silicon Valley Leadership Group
  • Michael Moskow In my judgment, while some risks to the outlook for growth remain a concern, these have diminished noticeably in recent months.

    [ February 16, 2007 ]

    In setting policy, the Federal Reserve needs to be mindful of the risks to the outlook for both growth and inflation. In my judgment, while some risks to the outlook for growth remain a concern, these have diminished noticeably in recent months. Housing will likely still be a negative for growth during the first half of this year, but it has shown signs of stabilization. And the risks of spillovers to other parts of the economy do not appear to be unduly large.  

  • Ben Bernanke If inflation becomes higher for some reason, the Federal Reserve would have to be respond by raising interest rates.

    [ February 15, 2007 ]

    We have had a period where inflation is above where we like to see it as far as consistency with price stability is concerned. In order for this expansion to continue in a sustainable way, inflation has to be well controlled.  If inflation becomes higher for some reason, the Federal Reserve would have to be respond by raising interest rates.

    In response to a question from Barney Frank  

  • Ben Bernanke In the statement accompanying last month's policy decision, the FOMC again indicated that its predominant policy concern is the risk that inflation will fail to ease as expected and that it is prepared to take action to address inflation risks if developments warrant.

    [ February 14, 2007 ]

    In the statement accompanying last month's policy decision, the FOMC again indicated that its predominant policy concern is the risk that inflation will fail to ease as expected and that it is prepared to take action to address inflation risks if developments warrant.

  • Richard Fisher I wouldn’t rule out further increases in the federal funds rate if inflationary winds gain the upper hand.

    [ February 9, 2007 ]

    I wouldn’t rule out further increases in the federal funds rate if inflationary winds gain the upper hand. Indeed, if increases are needed, I would aggressively advocate for them. But for now, I am as comfortable with the inflationary outlook as a prudent central banker can be. No central banker can ever be smug about containing the risk of inflation, but I am pleased with the current direction of inflationary impulses.

  • Sandra Pianalto Some additional policy firming may be needed - depending, of course, on the outlook for both inflation and economic growth.

    [ February 9, 2007 ]

    The national inflation picture has been clouded in the past few years by large swings in energy, commodity, and housing prices. As these markets normalize, and as we gain a clearer picture of the underlying inflation trend, we may see that some inflation risks remain. In that case, some additional policy firming may be needed - depending, of course, on the outlook for both inflation and economic growth.

    More From:

    Source:

    http://www.clevelandfed.org/dsp_showdetail_PressRel.cfm?contentId=648&detailId=603

    Venue:

    Southwest Florida Speakers Assembly
  • William Poole If, however, core inflation seems to be settling at a rate above 2 percent, then such an outcome would be unacceptable to me.

    [ February 9, 2007 ]

    If, however, core inflation seems to be settling at a rate above 2 percent, then such an outcome would be unacceptable to me. I put a very high weight on the Fed’s responsibility to maintain low and stable inflation...

    My commitment, certainly, is to do what I can to promote policy adjustments that will yield an inflation outcome, on average over a period of several years, centered on 1½ percent on the core PCE price index. Such an outcome will ensure that the FOMC maintains its current high level of credibility. Maintaining price stability is central to maximizing sustainable economic growth and the highest possible level of employment.     

  • Charles Plosser Inflation stopped accelerating in the last few months, but whether it will continue to recede in the coming year is not yet clear. Additional monetary policy action may be needed to keep us moving along the path to price stability. 

    [ February 7, 2007 ]

    I expect real GDP to grow by about 3 percent, which I estimate to be its underlying trend rate. That kind of growth should hold the unemployment rate to just below 5 percent. The outlook for inflation is more uncertain. Inflation stopped accelerating in the last few months, but whether it will continue to recede in the coming year is not yet clear. Additional monetary policy action may be needed to keep us moving along the path to price stability. 

  • Janet L. YellenWe've got a 4.6% unemployment rate.  That's great, if it stays in that region.

    [ February 6, 2007 ]

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    See Also:

    Source:

    http://www.frbsf.org/news/speeches/2007/0206.html

    Venue:

    Asia Society of Southern California
  • Thomas HoenigIn my opinion, there has been a discrepancy lately between the views of the FOMC members, as summarized in the Committee’s public statements, and the views of many financing market participants.  Although there is a wide range of views in the market, some participants have jumped to the conclusion that monetary policy will be eased in the near future.  Surveys of financial market economists show that many expect an easing in monetary policy sometime this year.  In addition, the yield curve and financing futures prices incorporate some expected easing of monetary policy later this year.

    In contrast, the FOMC has continued to express its concern about upside inflation risks. After its last meeting on December 12, the FOMC stated that “some inflation risk remain” and that “the extent and timing of any additional firming” would depend on how incoming data affected the outlook for growth and inflation.  

    In my view, the easing of monetary policy that market participants expect would be appropriate only if inflation clearly subsided from recent elevated levels, and if the incoming data implied the inflation outlook would remain favorable in the future.  In my judgment, it is premature to conclude that current conditions define a clear path for policy.

    [ January 19, 2007 ]
  • Jeffrey Lacker The risk that core inflation surges again, or does not subside as desired, clearly remains the predominant macroeconomic policy risk.

    [ January 19, 2007 ]

    The November inflation reports, however, have provided some tentative evidence suggesting a moderating trend. For example, the three-month average rate of change in the core PCE price index fell to 1.8 percent in November. That inflation measure has exhibited substantial oscillations, however – it fell to 1.8 percent in February of last year before rising to 2.9 percent within three months when energy prices surged. In view of the recent record, it will take several months worth of data to provide statistically convincing evidence of a moderation in inflation. In the meantime, the risk that core inflation surges again, or does not subside as desired, clearly remains the predominant macroeconomic policy risk.

  • Sandra Pianalto... I see the economy growing at a more moderate pace over the next few years than we saw in the past couple of years. But there are risks to this outlook. The first risk is that the weakness in the housing sector spills over to other sectors of the economy, depressing overall growth. The second risk is that inflation remains stubbornly high...

    The most recent price statistics have been encouraging, but not convincing...

    ...[T]here is still a risk that the underlying inflation trend will not continue to improve; in which case, the FOMC will need to respond with the appropriate policy actions.

    [ January 18, 2007 ]