January 3 · Published February 1, 2001
Statement·Presser·Minutes
AGAlan GreenspanJanuary 3, 2001 FOMC Minutes
Our reading
The minutes read somewhat more hawkish relative to the statement because they reveal that most members preferred to hold rates steady and await further evidence of weakening before easing, with the shift in the risks statement being a compromise rather than a unanimous endorsement of immediate action.
Our reading compares the minutes of the January 3 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- J. Alfred Broaddus, Jr.
- Roger W. Ferguson, Jr.
- Edward M. Gramlich
- Alan Greenspan
- Jack Guynn
- Jerry L. Jordan
- Edward W. Kelley, Jr.
- William J. McDonough
- Laurence H. Meyer
- Robert T. Parry
From the minutes
FOMC minutes
Votes against this action: None.
Chairman Greenspan indicated that shortly after this meeting the Board of Governors would consider pending requests by several Federal Reserve Banks to reduce the discount rate by 25 basis points. At the time of this conference call meeting, no pending requests for a 50 basis point reduction were outstanding, but the press release would indicate that the Board would be prepared to consider requests for further reductions of 25 basis points if they were received.
Donald L. Kohn
Secretary
What changed from the previous meeting’s minutes
- The risk statement shifted from weighted toward inflation to weighted toward economic weakness.
- The federal funds rate was cut by 50 basis points to 6 percent on January 3, 2001.
- The FOMC moved directly to a weakness risk statement without an intermediate balanced assessment.
- A telephone conference meeting was held on January 3, 2001, to consider the easing action.
- The next scheduled meeting was moved from December 19, 2000, to January 30-31, 2001.
- The discount rate reduction request was for 25 basis points, with potential for further cuts.
Summary generated automatically from the two documents.