October 30–31 · Published November 20, 2007
Statement·Presser·Minutes
BBBen S. BernankeOctober 30–31, 2007 FOMC Minutes
Our reading
The minutes are consistent with the statement because they detail the FOMC's decision to lower the federal funds rate by 25 basis points to 4-1/2 percent, acknowledge solid third-quarter growth and eased financial strains, anticipate a slowdown due to the housing correction, and note balanced risks between inflation and growth, all of which align with the statement's key points.
Our reading compares the minutes of the October 30–31 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Ben S. Bernanke
- Rudolph M. Evans
- Timothy F. Geithner
- Thomas M. Hoenig ↑ dissented
- Mr. Hoenig dissented because he believed that policy should remain unchanged at this meeting. Projections for the U.S. and global economies suggested that growth was likely to proceed at a reasonable pace over the outlook period. To better assure that outcome, the FOMC had moved rates down significantly at its September meeting. At this meeting, inflation risks appeared elevated and Mr. Hoenig felt that the target federal funds rate was currently close to neutral. In these circumstances, he judged that policy needed to be slightly firm to better hold inflation in check. Going forward, if the data suggested the Committee needed to ease further, it could do so. He also recognized that liquidity remains a near-term challenge and that the Federal Reserve would be prepared to act if needed. Mr. Hoenig saw the risks to both economic growth and inflation to be elevated and preferred to wait, watch, and be ready to act depending on how events developed.
- Donald L. Kohn
- Randall S. Kroszner
- Frederic S. Mishkin
- William Poole
- Eric S. Rosengren
- Kevin Warsh
From the minutes
FOMC minutes
The meeting adjourned at 12:00 noon.
Notation Vote
By notation vote completed on October 5, 2007, the Committee unanimously approved the minutes of the FOMC meeting held on September 18, 2007 and of the conference calls on August 10, 2007 and August 16, 2007.
Brian F. Madigan Secretary
What changed from the previous meeting’s minutes
- The FOMC cut the federal funds rate by 25 basis points to 4-1/2 percent, down from a 50 basis point cut in August.
- Mr. Hoenig dissented, preferring no change, whereas the August vote was unanimous.
- The FOMC judged upside risks to inflation roughly balanced downside risks to growth, replacing no explicit risk assessment.
- The statement noted economic growth was solid in the third quarter, versus an outlook of increased uncertainty in August.
- The FOMC agreed to publish economic projections with minutes, expanding from twice-yearly releases.
- The staff revised up third-quarter GDP estimates, citing stronger consumer spending, business investment, and exports.
Summary generated automatically from the two documents.