December 17–18 · Published January 8, 2014
BBBen S. BernankeDecember 17–18, 2013 FOMC Minutes
Our reading
The minutes are consistent with the statement because both documents describe the FOMC's decision to modestly reduce the pace of asset purchases in January, citing cumulative progress in labor market conditions and an improved outlook, while also emphasizing that the reduction is not on a preset course and that future decisions will depend on economic and financial developments.
Our reading compares the minutes of the December 17–18 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
- Charles L. Evans
- Esther L. George
- Jerome H. Powell
- Eric S. Rosengren ↓ dissented
- Mr. Rosengren dissented because he viewed the decision to slow the pace of asset purchases at this meeting as premature. In his view, with the unemployment rate still elevated and the inflation rate well below the Committee's longer-run objective of 2 percent, changes in the asset purchase program should be postponed until incoming data more clearly indicate that economic growth is likely to be sustained above its potential rate. He saw the costs of delaying action at this meeting as likely to be small relative to the gains from promoting a faster return of both elements of the Committee's dual mandate to their longer-run objectives.
- 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, Charles L. Evans, Esther L. George, Jerome H. Powell, Jeremy C. Stein, Daniel K. Tarullo, and Janet L. Yellen.
Voting against this action: Eric Rosengren.
Mr. Rosengren dissented because he viewed the decision to slow the pace of asset purchases at this meeting as premature. In his view, with the unemployment rate still elevated and the inflation rate well below the Committee's longer-run objective of 2 percent, changes in the asset purchase program should be postponed until incoming data more clearly indicate that economic growth is likely to be sustained above its potential rate. He saw the costs of delaying action at this meeting as likely to be small relative to the gains from promoting a faster return of both elements of the Committee's dual mandate to their longer-run objectives.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, January 28-29, 2014. The meeting adjourned at 11:00 a.m. on December 18, 2013.
What changed from the previous meeting’s minutes
- The FOMC reduced monthly asset purchases from $45 billion to $40 billion in Treasury securities and from $40 billion to $35 billion in MBS, effective January.
- The dissenting vote shifted from Esther L. George to Eric Rosengren, who opposed the taper as premature.
- The forward guidance added that the federal funds rate would likely stay low well past the 6.5 percent unemployment threshold.
- The FOMC dropped the reference to downside risks, describing risks as "more nearly balanced" instead.
- The statement noted fiscal restraint "may be diminishing" rather than simply "restraining" growth.
- The FOMC added language that it would likely reduce purchases in "further measured steps" at future meetings.
Summary generated automatically from the two documents.