March 19–20 · Published April 10, 2013
BBBen S. BernankeMarch 19–20, 2013 FOMC Minutes
Our reading
The minutes are consistent with the statement because both documents reflect the FOMC's decision to maintain the current pace of asset purchases ($40 billion MBS and $45 billion Treasuries per month) and the federal funds rate target range of 0 to 1/4 percent, while acknowledging a range of views among participants about the timing and conditions for potentially slowing purchases, as detailed in the minutes' discussion of the efficacy, costs, and risks of the program.
Our reading compares the minutes of the March 19–20 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
- Charles L. Evans
- Esther L. George ↑ dissented
- Ms. George dissented because she continued to view monetary policy as too accommodative and therefore as posing risks to the achievement of the Committee's economic objectives in the long run. In particular, the current stance of policy could lead to financial imbalances, a mispricing of risk, and, over time, higher long-term inflation expectations. In her view, the Committee's asset purchases were providing relatively small benefits, and, given the risks that they posed as well as the improvement in the outlook for the labor market, she thought they should be wound down.
- Jerome H. Powell
- Sarah Bloom Raskin
- Eric S. Rosengren
- Jeremy C. Stein
- Daniel K. Tarullo
- Janet L. Yellen
From the minutes
FOMC minutes
Voting for this action: Ben Bernanke, William C. Dudley, James Bullard, Elizabeth Duke, Charles L. Evans, Jerome H. Powell, Sarah Bloom Raskin, Eric Rosengren, Jeremy C. Stein, Daniel K. Tarullo, and Janet L. Yellen.
Voting against this action: Esther L. George.
Ms. George dissented because she continued to view monetary policy as too accommodative and therefore as posing risks to the achievement of the Committee's economic objectives in the long run. In particular, the current stance of policy could lead to financial imbalances, a mispricing of risk, and, over time, higher long-term inflation expectations. In her view, the Committee's asset purchases were providing relatively small benefits, and, given the risks that they posed as well as the improvement in the outlook for the labor market, she thought they should be wound down.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, April 30-May 1, 2013. The meeting adjourned at 11:30 a.m. on March 20, 2013.
What changed from the previous meeting’s minutes
- Participants now saw downside risks to inflation if growth did not pick up, whereas before they saw inflation at or below target.
- Discussion of asset purchase efficacy shifted to include views that effectiveness might have increased recently.
- A few participants now preferred MBS purchases for direct housing support, while others favored Treasury-only purchases.
- Several participants suggested holding MBS to maturity to eliminate sales risk, a new option not previously discussed.
- The statement acknowledged fiscal policy had become "somewhat more restrictive," a change from the prior "fiscal concerns" reference.
- The next meeting was scheduled for April 30-May 1, 2013, with a March 20, 2013, meeting also noted.
Summary generated automatically from the two documents.