June 22–23 · Published July 14, 2010
Statement·Presser·Minutes·Policy
BBBen S. BernankeJune 22–23, 2010 FOMC Minutes
Our reading
The minutes read consistent with the statement because they reflect the same key economic assessments and policy decisions, while providing additional detail and context. Specifically, the minutes echo the statement's observations on the moderate recovery, gradual labor market improvement, subdued inflation, and the decision to maintain the federal funds rate at 0 to 1/4 percent with an expectation of exceptionally low rates for an extended period. The minutes also align with the statement's acknowledgment of less supportive financial conditions due to developments abroad (e.g., European fiscal strains) and the ongoing contraction in bank lending. However, the minutes expand on these points by including participants' detailed projections, discussions of risks (e.g., downside risks to growth and inflation), and the dissenting view of Thomas M. Hoenig, who objected to the "extended period" language. Thus, the minutes are consistent with the statement in substance, but they offer a more comprehensive narrative of the deliberations and individual perspectives that informed the statement's content.
Our reading compares the minutes of the June 22–23 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 that, as the economy completed its first year of modest recovery, 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." Although risks to the forecast remained, Mr. Hoenig was concerned that communicating such an expectation would limit the Committee's flexibility to begin raising rates modestly in a timely fashion and could result in a buildup of future financial imbalances and increase the risks to longer-run macroeconomic and financial stability.
- Donald L. Kohn
- Sandra Pianalto
- Eric S. Rosengren
- Daniel K. Tarullo
- Kevin Warsh
From the minutes
FOMC minutes
Voting against this action: Thomas M. Hoenig.
Mr. Hoenig dissented because he believed that, as the economy completed its first year of modest recovery, 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." Although risks to the forecast remained, Mr. Hoenig was concerned that communicating such an expectation would limit the Committee's flexibility to begin raising rates modestly in a timely fashion and could result in a buildup of future financial imbalances and increase the risks to longer-run macroeconomic and financial stability.
By unanimous vote, the Committee selected William B. English to serve as Secretary and Economist, and James A. Clouse to serve as Associate Economist, effective July 23, 2010, until the selection of their successors at the first regularly scheduled meeting of the Committee in 2011.
It was agreed that the next meeting of the Committee would be held on Tuesday, August 10, 2010. The meeting adjourned at 12:10 p.m. on June 23, 2010.
What changed from the previous meeting’s minutes
- Participants revised down slightly their outlook for economic growth, with about half seeing downside risks.
- Financial markets were seen as less supportive of growth due to European fiscal strains.
- Core inflation readings had slowed, and other underlying measures moved down this year.
- Statement added that financial conditions had become less supportive, largely reflecting developments abroad.
- Statement noted prices of energy and other commodities had declined somewhat in recent months.
- Directive expanded to include coupon swap transactions alongside dollar roll transactions.
Summary generated automatically from the two documents.