June 23–24 · Published July 15, 2009
Statement·Presser·Minutes·Policy
BBBen S. BernankeJune 23–24, 2009 FOMC Minutes
Our reading
The minutes read consistent with the statement because both documents convey the same key assessments and policy decisions: the economic contraction is slowing, financial markets have improved, household spending is stabilizing but constrained, inflation is expected to remain subdued due to resource slack, and the FOMC maintains the federal funds rate at 0 to 1/4 percent with asset purchase programs proceeding as previously announced. The minutes provide a more detailed discussion of participants' views, but they align with the statement's overall tone and conclusions.
Our reading compares the minutes of the June 23–24 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
- 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
In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted."
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.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, August 11-12, 2009. The meeting adjourned at 12:40 p.m. on June 24, 2009.
What changed from the previous meeting’s minutes
- Participants shifted from seeing tentative signs of stabilization to agreeing the contraction was slowing and could cease before long.
- The April survey showed a large net fraction of banks tightening credit; June minutes noted credit still tight but did not cite a new survey.
- June minutes added that SCAP results bolstered bank confidence and led to large private capital infusions.
- June minutes expressed concern that rising mortgage rates could depress housing demand, absent in April.
- June minutes noted oil and commodity price increases would raise headline inflation, while April focused on subdued inflation and deflation risk.
- June minutes removed the April statement that further asset purchase increases might be warranted, citing uncertain effects.
Summary generated automatically from the two documents.