January 24–25 · Published February 15, 2012
Statement·Presser·Minutes·Policy
BBBen S. BernankeJanuary 24–25, 2012 FOMC Minutes
Our reading
The minutes read consistent with the statement because both documents describe the economy as expanding moderately, labor market conditions improving but unemployment remaining elevated, inflation subdued with stable longer-term expectations, and the FOMC deciding to maintain a highly accommodative monetary policy stance, including keeping the federal funds rate at 0 to 1/4 percent through late 2014 and continuing the maturity extension program, while acknowledging significant downside risks from global financial strains.
Our reading compares the minutes of the January 24–25 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
- Jeffrey M. Lacker ↑ dissented
- Mr. Lacker dissented because he preferred to omit the description of the time period over which economic conditions were likely to warrant exceptionally low levels of the federal funds rate. He expected that a preemptive tightening of monetary policy would be necessary to prevent an increase in inflation projections or inflation expectations prior to the end of 2014. More broadly, given the inclusion of FOMC participants' projections for the federal funds rate target in the Summary of Economic Projections, he saw no need to provide additional forward guidance in the Committee statement.
- Dennis P. Lockhart
- Sandra Pianalto
- Sarah Bloom Raskin
- Daniel K. Tarullo
- John C. Williams
- Janet L. Yellen
From the minutes
FOMC minutes
Voting for this action: Ben Bernanke, William C. Dudley, Elizabeth Duke, Dennis P. Lockhart, Sandra Pianalto, Sarah Bloom Raskin, Daniel K. Tarullo, John C. Williams, and Janet L. Yellen.
Voting against this action: Jeffrey M. Lacker.
Mr. Lacker dissented because he preferred to omit the description of the time period over which economic conditions were likely to warrant exceptionally low levels of the federal funds rate. He expected that a preemptive tightening of monetary policy would be necessary to prevent an increase in inflation projections or inflation expectations prior to the end of 2014. More broadly, given the inclusion of FOMC participants' projections for the federal funds rate target in the Summary of Economic Projections, he saw no need to provide additional forward guidance in the Committee statement.
It was agreed that the next meeting of the Committee would be held on Tuesday, March 13, 2012. The meeting adjourned at 11:30 a.m. on January 25, 2012.
What changed from the previous meeting’s minutes
- Forward guidance horizon extended from mid-2013 to late 2014.
- Dissent changed from Charles Evans (preferring more accommodation) to Jeffrey Lacker (opposing forward guidance).
- Committee membership changed: Lockhart, Pianalto, and Williams replaced Fisher, Kocherlakota, and Plosser.
- Financial conditions described as improved with eased stresses, versus volatile previously.
- Discussion of numerical thresholds for unemployment and inflation in forward guidance introduced.
- One member anticipated preemptive tightening before end of 2014, a new position.
Summary generated automatically from the two documents.