July 29–30 · Published August 20, 2014
Statement·Presser·Minutes
JYJanet L. YellenJuly 29–30, 2014 FOMC Minutes
Our reading
The minutes read somewhat more hawkish relative to the statement because they reveal that several participants were increasingly uncomfortable with the FOMC's forward guidance, with some viewing the actual and expected progress toward the FOMC's goals as sufficient to call for a relatively prompt move toward reducing policy accommodation to avoid overshooting its unemployment and inflation objectives.
Our reading compares the minutes of the July 29–30 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Lael Brainard
- William C. Dudley
- Stanley Fischer
- Richard W. Fisher
- Narayana Kocherlakota
- Loretta J. Mester
- Charles I. Plosser • dissented
- Mr. Plosser dissented because he objected to the statement's guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for "a considerable time after the asset purchase program ends." In his view, the reference to calendar time should be replaced with language that indicates how monetary policy will respond to incoming data. Moreover, he judged that the statement did not acknowledge the substantial progress that had been made toward the Committee's economic goals and thus risks unnecessary and disruptive volatility in financial markets, and perhaps in the economy, if the Committee reduces accommodation sooner or more quickly than financial markets anticipate.
- Jerome H. Powell
- Daniel K. Tarullo
- Janet L. Yellen
From the minutes
FOMC minutes
Voting for this action: Janet L. Yellen, William C. Dudley, Lael Brainard, Stanley Fischer, Richard W. Fisher, Narayana Kocherlakota, Loretta J. Mester, Jerome H. Powell, and Daniel K. Tarullo.
Voting against this action: Charles I. Plosser.
Mr. Plosser dissented because he objected to the statement's guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for "a considerable time after the asset purchase program ends." In his view, the reference to calendar time should be replaced with language that indicates how monetary policy will respond to incoming data. Moreover, he judged that the statement did not acknowledge the substantial progress that had been made toward the Committee's economic goals and thus risks unnecessary and disruptive volatility in financial markets, and perhaps in the economy, if the Committee reduces accommodation sooner or more quickly than financial markets anticipate.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, September 16-17, 2014. The meeting adjourned at 11:55 a.m. on July 30, 2014.
What changed from the previous meeting’s minutes
- Asset purchases reduced to $15 billion Treasury and $10 billion MBS per month from $20 billion and $15 billion.
- Charles I. Plosser dissented against maintaining federal funds rate guidance, the first dissent in the period.
- Statement language changed to cite "significant underutilization of labor resources" instead of solely the unemployment rate.
- Statement added that inflation moved "somewhat closer" to the 2 percent objective and persistent undershoot risk diminished.
- Participants shifted from viewing financial stability risks as concerning to seeing vulnerabilities as well contained.
- Most participants judged downside risks to inflation had diminished, a change from prior concerns about persistence.
Summary generated automatically from the two documents.