The FOMC noted on October 31 that "economic growth was solid in the third quarter, and strains in financial markets have eased somewhat." However, the committee added "the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction." The committee believed its October 31 policy action, combined with its action taken in September, "should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time."
As discussed a moment ago, my view of the economy is consistent with the FOMC statement, and I supported last week's policy action. In part, my position was based on the notion of insurance against downside risks to the general economy given the unusually high level of uncertainty.