bart
05-16-07, 01:09 PM
The Fed's FOMC 2001 meeting transcripts have recently been made public (there's a mandated 5 year lag).
Here's some "interesting" tidbits.
August 21, 2001:
CHAIRMAN GREENSPAN: In fact, if we could actually arrange it, that would be the ideal way. In other words, the ideal way would be that we don’t shock the market but that suddenly we get the federal funds futures rates flattening out because the data are beginning to look better. And at the moment I see nothing to prevent us from doing that.
...
MR. MCTEER: Based only on the state of the economy and its near-term prospects, a large policy action is called for today. But it’s a closer call when we consider the lags and the degree of stimulus already in the pipeline. As for the directive and the bias statement, I don’t know whether it’s better to speak softly and carry a big stick or to be more diplomatic and say “nice doggy” while looking for an even bigger stick. If the bias statement and the press release weren’t already written, I’d say it’s going to be difficult to write them this time. [Laughter]
CHAIRMAN GREENSPAN: It was!
...
CHAIRMAN GREENSPAN: Questions for Don? If not, let me get started. I think it's fairly evident, certainly in retrospect, that we are seeing an absorption of very large capital losses throughout the economic system. I don't know whether one would call this a structural adjustment, but it certainly is not what we have embodied in our standard post-World War II econometric models. It's a different sort of phenomenon and it’s clearly being engendered by a set of forces that are largely without historical precedent in the post-World War II period.
...
CHAIRMAN GREENSPAN: What has happened is simply a fundamental shift in the general degree of confidence. In the same sense that expectations were very clearly overdone on the upside, they are being underdone, if I may put it that way, on the downside; and that will continue to be so until the normal cycle, not of the business environment but of human psychology, runs its course.
...
MR. GUYNN: I don’t know whether the answer is a phrase in the statement or what. But if we continue to ease and continue to have the balance of risks statement the way it has been, I’m not sure how we will get off that treadmill as quickly as I suspect we’re going to want to.
CHAIRMAN GREENSPAN: I think the market is going to take us off the treadmill.
MR. GUYNN: I hope that’s the way it’s done.
CHAIRMAN GREENSPAN: In fact, if we could actually arrange it, that would be the ideal way. In other words, the ideal way would be that we don’t shock the market but that suddenly we get the federal funds futures rates flattening out because the data are beginning to look better. And at the moment I see nothing to prevent us from doing that.
http://www.federalreserve.gov/fomc/transcripts
Here's some "interesting" tidbits.
August 21, 2001:
CHAIRMAN GREENSPAN: In fact, if we could actually arrange it, that would be the ideal way. In other words, the ideal way would be that we don’t shock the market but that suddenly we get the federal funds futures rates flattening out because the data are beginning to look better. And at the moment I see nothing to prevent us from doing that.
...
MR. MCTEER: Based only on the state of the economy and its near-term prospects, a large policy action is called for today. But it’s a closer call when we consider the lags and the degree of stimulus already in the pipeline. As for the directive and the bias statement, I don’t know whether it’s better to speak softly and carry a big stick or to be more diplomatic and say “nice doggy” while looking for an even bigger stick. If the bias statement and the press release weren’t already written, I’d say it’s going to be difficult to write them this time. [Laughter]
CHAIRMAN GREENSPAN: It was!
...
CHAIRMAN GREENSPAN: Questions for Don? If not, let me get started. I think it's fairly evident, certainly in retrospect, that we are seeing an absorption of very large capital losses throughout the economic system. I don't know whether one would call this a structural adjustment, but it certainly is not what we have embodied in our standard post-World War II econometric models. It's a different sort of phenomenon and it’s clearly being engendered by a set of forces that are largely without historical precedent in the post-World War II period.
...
CHAIRMAN GREENSPAN: What has happened is simply a fundamental shift in the general degree of confidence. In the same sense that expectations were very clearly overdone on the upside, they are being underdone, if I may put it that way, on the downside; and that will continue to be so until the normal cycle, not of the business environment but of human psychology, runs its course.
...
MR. GUYNN: I don’t know whether the answer is a phrase in the statement or what. But if we continue to ease and continue to have the balance of risks statement the way it has been, I’m not sure how we will get off that treadmill as quickly as I suspect we’re going to want to.
CHAIRMAN GREENSPAN: I think the market is going to take us off the treadmill.
MR. GUYNN: I hope that’s the way it’s done.
CHAIRMAN GREENSPAN: In fact, if we could actually arrange it, that would be the ideal way. In other words, the ideal way would be that we don’t shock the market but that suddenly we get the federal funds futures rates flattening out because the data are beginning to look better. And at the moment I see nothing to prevent us from doing that.
http://www.federalreserve.gov/fomc/transcripts