September 16–17 · Published October 8, 2014
JYJanet L. YellenSeptember 16–17, 2014 FOMC Minutes
Our reading
The minutes are consistent with the statement because both documents describe the same economic conditions—moderate growth, gradual labor market improvement with significant slack, subdued inflation, and stable expectations—and both support the decision to reduce asset purchases by $5 billion per month in October while maintaining the federal funds rate target and forward guidance.
Our reading compares the minutes of the September 16–17 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 ↑ dissented
- President Fisher dissented because he believed that the continued strengthening of the real economy, the improved outlook for labor utilization and for general price stability, and continued signs of financial market excess will likely warrant an earlier reduction in monetary accommodation than is suggested by the Committee's stated forward guidance.
- 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 against this action: Richard W. Fisher and Charles I. Plosser.
President Fisher dissented because he believed that the continued strengthening of the real economy, the improved outlook for labor utilization and for general price stability, and continued signs of financial market excess will likely warrant an earlier reduction in monetary accommodation than is suggested by the Committee's stated forward guidance.
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, October 28-29, 2014. The meeting adjourned at 10:35 a.m. on September 17, 2014.
What changed from the previous meeting’s minutes
- The FOMC reduced monthly Treasury purchases from $15 billion to $10 billion and agency MBS from $10 billion to $5 billion.
- The unemployment rate was described as "little changed" instead of "declining further."
- Inflation was noted as having "fallen back somewhat" recently, not just moving closer to 2 percent.
- The dissenting votes increased from one (Plosser) to two members.
- The statement removed the phrase "considerable time" from the forward guidance on the federal funds rate.
- The description of labor market conditions changed from "improved" to "improved somewhat further."
Summary generated automatically from the two documents.