March 13 · Published April 3, 2012
Statement·Presser·Minutes
BBBen S. BernankeMarch 13, 2012 FOMC Minutes
Our reading
The minutes read consistently with the statement because they reflect the same key points: the economy is expanding moderately, labor market conditions have improved but unemployment remains elevated, the housing sector is depressed, inflation is subdued but will be temporarily pushed up by rising oil and gasoline prices, longer-term inflation expectations are stable, and the FOMC maintains a highly accommodative stance with the federal funds rate at 0 to 1/4 percent through late 2014, while continuing its securities maturity extension program.
Our reading compares the minutes of the March 13 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 did not agree that economic conditions were likely to warrant exceptionally low levels of the federal funds rate at least through late 2014. In his view, with inflation close to the Committee's objective of 2 percent, the economy expanding at a moderate pace, and downside risks somewhat diminished, the federal funds rate will most likely need to rise considerably sooner to prevent the emergence of inflationary pressures. Mr. Lacker continues to prefer to provide forward guidance regarding future Committee policy actions through the inclusion of FOMC participants' projections of the federal funds rate in the Summary of Economic Projections (SEP).
- Dennis P. Lockhart
- Sandra Pianalto
- Sarah Bloom Raskin
- Daniel K. Tarullo
- John C. Williams
- Janet L. Yellen
From the minutes
FOMC minutes
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability."
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 did not agree that economic conditions were likely to warrant exceptionally low levels of the federal funds rate at least through late 2014. In his view, with inflation close to the Committee's objective of 2 percent, the economy expanding at a moderate pace, and downside risks somewhat diminished, the federal funds rate will most likely need to rise considerably sooner to prevent the emergence of inflationary pressures. Mr. Lacker continues to prefer to provide forward guidance regarding future Committee policy actions through the inclusion of FOMC participants' projections of the federal funds rate in the Summary of Economic Projections (SEP).
What changed from the previous meeting’s minutes
- Participants noted euro-area policy actions reduced short-term financial stresses, whereas January cited ongoing strains.
- Most participants expected inflation to run at or below 2 percent after temporary oil price effects, replacing "almost all" from January.
- Participants cited unseasonably warm weather as an uncertainty in interpreting data, not mentioned in January.
- A couple of members saw additional stimulus as possibly necessary if economy lost momentum, down from "a few" in January.
- One member judged tightening necessary well before end of 2014, versus "before the end of 2014" in January.
- Statement noted strains in global financial markets had eased, replacing "continue to pose significant downside risks" from January.
Summary generated automatically from the two documents.