March 16 · Published April 6, 2010
Statement·Presser·Minutes
BBBen S. BernankeMarch 16, 2010 FOMC Minutes
Our reading
The minutes read consistent with the statement because both documents describe the same economic conditions—such as strengthening activity, stabilizing labor markets, subdued inflation, and the need for exceptionally low federal funds rates—and outline identical policy actions, including maintaining the 0 to 1/4 percent target range and completing the planned asset purchases by the end of March.
Our reading compares the minutes of the March 16 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Ben S. Bernanke
- James B. Bullard
- William C. Dudley
- Elizabeth A. Duke
- Thomas M. Hoenig ↑ dissented
- Mr. Hoenig dissented because he believed it was no longer advisable to indicate that economic and financial conditions were likely to warrant "exceptionally low levels of the federal funds rate for an extended period." Mr. Hoenig was concerned that communicating such an expectation could lead to the buildup of future financial imbalances and increase the risks to longer-run macroeconomic and financial stability. Accordingly, Mr. Hoenig believed that it would be more appropriate for the Committee to express its anticipation that economic conditions were likely to warrant "a low level of the federal funds rate for some time." Such a change in communication would provide the Committee flexibility to begin raising rates modestly. He further believed that making such an adjustment to the Committee's target for the federal funds rate sooner rather than later would reduce longer-run risks to macroeconomic and financial stability while continuing to provide needed support to the economic recovery.
- Donald L. Kohn
- Sandra Pianalto
- Eric S. Rosengren
- Daniel K. Tarullo
- Kevin Warsh
From the minutes
FOMC minutes
Voting for this action: Ben Bernanke, William C. Dudley, James Bullard, Elizabeth Duke, Donald L. Kohn, Sandra Pianalto, Eric Rosengren, Daniel K. Tarullo, and Kevin Warsh.
Voting against this action: Thomas M. Hoenig.
Mr. Hoenig dissented because he believed it was no longer advisable to indicate that economic and financial conditions were likely to warrant "exceptionally low levels of the federal funds rate for an extended period." Mr. Hoenig was concerned that communicating such an expectation could lead to the buildup of future financial imbalances and increase the risks to longer-run macroeconomic and financial stability. Accordingly, Mr. Hoenig believed that it would be more appropriate for the Committee to express its anticipation that economic conditions were likely to warrant "a low level of the federal funds rate for some time." Such a change in communication would provide the Committee flexibility to begin raising rates modestly. He further believed that making such an adjustment to the Committee's target for the federal funds rate sooner rather than later would reduce longer-run risks to macroeconomic and financial stability while continuing to provide needed support to the economic recovery.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, April 27-28, 2010. The meeting adjourned at 1:00 p.m. on March 16, 2010.
What changed from the previous meeting’s minutes
- Participants upgraded labor market assessment from "deterioration abating" to "stabilizing."
- Minutes noted a slight greater deceleration in consumer prices than previously expected.
- Housing starts described as flat at a depressed level, with foreclosures expected to rise.
- Statement removed reference to evaluating securities "purchases," now monitoring outlook and financial developments.
- Term Asset-Backed Securities Loan Facility closure dates reaffirmed as only remaining special liquidity facility.
- Dissent unchanged: Hoenig again opposed "extended period" language, preferring "low level for some time."
Summary generated automatically from the two documents.