October 23–24 · Published November 14, 2012
Statement·Presser·Minutes
BBBen S. BernankeOctober 23–24, 2012 FOMC Minutes
Our reading
The minutes are consistent with the statement because both documents describe the same economic conditions—moderate growth, slow employment gains, elevated unemployment, faster household spending, slower business investment, improving housing, and higher inflation due to energy prices—and both outline the same policy actions, including continued MBS purchases at $40 billion per month, the maturity extension program, and the federal funds rate target of 0 to 1/4 percent through mid-2015.
Our reading compares the minutes of the October 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
- Elizabeth A. Duke
- Jeffrey M. Lacker ↑ dissented
- Mr. Lacker dissented for the same reasons he had cited at the September FOMC meeting, including his view of the likely ineffectiveness of asset purchases and their potential inflationary effects, as well as the inappropriateness of credit allocation inherent in purchasing MBS. He also continued to disagree with the description of the time period over which a highly accommodative stance of monetary policy would remain appropriate and exceptionally low levels for the federal funds rate were likely to be warranted.
- Dennis P. Lockhart
- Sandra Pianalto
- Jerome H. Powell
- Sarah Bloom Raskin
- Jeremy C. Stein
- Daniel K. Tarullo
- John C. Williams
- Janet L. Yellen
From the minutes
FOMC minutes
To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015."
Voting for this action: Ben Bernanke, William C. Dudley, Elizabeth Duke, Dennis P. Lockhart, Sandra Pianalto, Jerome H. Powell, Sarah Bloom Raskin, Jeremy C. Stein, Daniel K. Tarullo, John C. Williams, and Janet L. Yellen.
Voting against this action: Jeffrey M. Lacker.
Mr. Lacker dissented for the same reasons he had cited at the September FOMC meeting, including his view of the likely ineffectiveness of asset purchases and their potential inflationary effects, as well as the inappropriateness of credit allocation inherent in purchasing MBS. He also continued to disagree with the description of the time period over which a highly accommodative stance of monetary policy would remain appropriate and exceptionally low levels for the federal funds rate were likely to be warranted.
What changed from the previous meeting’s minutes
- September minutes discussed replacing calendar-date forward guidance with numerical thresholds; October minutes judged existing guidance effective and retained it.
- September minutes debated MBS versus Treasury purchases; October minutes reported MBS purchases lowered mortgage rates and supported housing.
- October minutes noted household spending advanced more quickly, while September minutes only said it continued to advance.
- October minutes reported business fixed investment slowed noticeably; September minutes said growth in business fixed investment appeared to have slowed.
- October minutes cited inflation picked up somewhat due to energy prices; September minutes said inflation was subdued despite commodity price increases.
- October minutes stated additional asset purchases likely appropriate next year after maturity extension program ends; September minutes made no such forward reference.
Summary generated automatically from the two documents.