July 30–31 · Published August 21, 2013
Statement·Presser·Minutes
BBBen S. BernankeJuly 30–31, 2013 FOMC Minutes
Our reading
The minutes are consistent with the statement because they detail the same economic assessments (e.g., modest growth, improved labor market but elevated unemployment, low inflation due to transitory factors), the same policy decisions (continuing asset purchases at $40 billion MBS and $45 billion Treasuries, maintaining the federal funds rate at 0-1/4%, and reaffirming forward guidance with the 6.5% unemployment threshold), and the same rationale (supporting recovery, managing inflation risks, and noting diminished downside risks), while also providing the underlying discussion and dissenting view that shaped the statement's final wording.
Our reading compares the minutes of the July 30–31 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
- She favored including in the policy statement a more explicit signal that the pace of the Committee's asset purchases would be reduced in the near term. She expressed concerns about the open-ended approach to asset purchases and viewed providing such a signal as important at this time, in light of the ongoing improvement in labor market conditions as well as the potential costs and uncertain benefits of large-scale asset purchases.
- 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 favored including in the policy statement a more explicit signal that the pace of the Committee's asset purchases would be reduced in the near term. She expressed concerns about the open-ended approach to asset purchases and viewed providing such a signal as important at this time, in light of the ongoing improvement in labor market conditions as well as the potential costs and uncertain benefits of large-scale asset purchases.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, September 17-18, 2013. The meeting adjourned at 12:30 p.m. on July 31, 2013.
What changed from the previous meeting’s minutes
- The FOMC added language recognizing that inflation persistently below its 2 percent objective could pose risks to economic performance.
- The statement changed "expects" to "reaffirmed its view" regarding a highly accommodative stance remaining appropriate after asset purchases end.
- James Bullard voted for the action in July, having dissented in June over signaling stronger defense of the 2 percent inflation goal.
- The July minutes noted market expectations for monetary policy appeared well aligned with participants' own expectations by the end of the intermeeting period.
- The FOMC discussed potentially lowering the unemployment threshold in forward guidance, with several participants willing to contemplate it if additional accommodation became necessary.
- The July minutes described a contingent plan to conclude asset purchases around mid-2014, with unemployment near 7 percent, which was not in the June minutes.
Summary generated automatically from the two documents.