April 28–29 · Published May 20, 2009
Statement·Presser·Minutes
BBBen S. BernankeApril 28–29, 2009 FOMC Minutes
Our reading
The minutes are consistent with the statement because both describe the economy as contracting at a slower pace, with tentative signs of stabilization in household spending and financial markets, while acknowledging ongoing weakness, subdued inflation risks, and the FOMC's commitment to maintaining the federal funds rate near zero and executing the announced large-scale asset purchases to support economic recovery.
Our reading compares the minutes of the April 28–29 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Ben S. Bernanke
- William C. Dudley
- Elizabeth A. Duke
- Rudolph M. Evans
- Donald L. Kohn
- Jeffrey M. Lacker
- Dennis P. Lockhart
- Daniel K. Tarullo
- Kevin Warsh
- Janet L. Yellen
From the minutes
FOMC minutes
Voting for this action: Messrs. Bernanke and Dudley, Ms. Duke, Messrs. Evans, Kohn, Lacker, Lockhart, Tarullo, and Warsh, and Ms. Yellen.
Voting against this action: None.
Governor Kohn reported to the Committee on the progress of a Federal Reserve workgroup in its review of the information provided to the public regarding Federal Reserve programs and activities. That review was being conducted to identify opportunities for providing additional information to the public without compromising the Federal Reserve's mandated policy objectives. The workgroup had been devoting particular attention to approaches to enhancing the transparency of the Federal Reserve's liquidity and credit facilities, including regular reporting on the number, types, and concentration of borrowers from each program; the amount and nature of collateral accepted; detailed background information on special purpose vehicles; and contracts with private-sector firms that had been engaged to help carry out some of these programs. In the Committee's discussion of these issues, it was noted that disclosing the identities of individual borrowers would very likely discourage use of the Federal Reserve's liquidity and credit facilities because prospective borrowers would be concerned that their creditors and counterparties would see borrowing from the Federal Reserve as a sign of financial weakness. The resulting stigma would undermine the effectiveness of those programs in promoting financial stability and economic recovery.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, June 23-24, 2009. The meeting adjourned at 11:50 a.m. on April 29, 2009.
What changed from the previous meeting’s minutes
- Participants reported tentative evidence that the pace of contraction was starting to diminish, versus deterioration in March.
- Financial market conditions were seen as generally strengthened, with equity prices up and risk spreads narrowed.
- Participants judged the risk of a protracted period of deflation had diminished.
- Committee agreed to continue asset purchases at previously announced amounts, with no increase decided.
- Treasury purchases were to be completed by autumn, replacing the previous six-month horizon.
- Participants provided formal economic projections for 2009-2011 and longer run, a new practice.
Summary generated automatically from the two documents.