MS. MINEHAN.
At present , we in Boston , like the Greenbook authors , do n't expect that subprime mortgage problems will by themselves have much of an effect on overall growth .
MR. EVANS.
Retailers thought that continued high energy prices were holding back consumers , but demand was not seen as deteriorating sharply .
Core price inflation -- that is , inflation excluding food and energy prices -- also firmed toward the end of the year .
MR. PLOSSER.
I also think that there is some risk of temporary weakness in business fixed investment going forward simply because of increased uncertainty .
MS. MINEHAN.
I found the relatively low GDP and consumption figures for late ’06 and ’07 in the Greenbook forecast a bit disquieting , even after recognizing the effect of the benchmark revisions on potential GDP .
MR. MADIGAN.
Incoming information has also prompted a small upward revision to your projections of core PCE inflation this year -LRB- the fourth set of rows -RRB- .
MR. WILCOX.
11 , MR. WILCOX. , '' Broadly , I do n't disagree that the acceleration in consumer prices is broadly based .
MR. LACKER.
So I 'm less sanguine overall about the near-term outlook for growth at this meeting , although that may just represent catching up on my part to the Greenbook 's past level of gloominess .
MR. KOHN.
The sense that it is neutral right now , much less accommodative , depends very much on our expectations of substantial increases in risk-taking in financial markets .
MS. LIANG.
We also present projections based on the Greenbook recession alternative with the additional assumption that national house prices fall 20 percent .
One final issue that I would like to raise is the growing inequality of income earnings and wealth in the U.S. economy .
MR. GUYNN.
Like others , I 've been both somewhat surprised but certainly pleased at the steady and strong pace of real GDP and job growth we 've been experiencing .
MR. SLIFMAN.
Such an outcome , especially if accompanied by a drop in consumer confidence , would restrain PCE and GDP growth appreciably over the next two years .
MR. SLIFMAN.
In any event , we see no reason to alter our first-quarter forecast as a result of the BEA 's fourth-quarter GDP estimate .
MS. PIANALTO.
The current Greenbook baseline projection for GDP is even lower than it was at the time of our last meeting because of revisions , as Dave mentioned , to both supply and demand factors .
MS. YELLEN.
The latest data do n't point to an imminent recovery in this sector , and I fear that the recent run-up in mortgage rates will only make matters worse .
The Federal Reserve will remain highly attentive to developments abroad and to their potential effects on the U.S. economy .
MR. GUYNN.
I believe that the least risky policy strategy through these unusual times is to set monetary policy so that it does not contribute to unsustainable activities .
And I guess , Mr. Chairman , my question to you is has the Federal Reserve looked at the potential impact of another major natural catastrophe on the U.S. economy ?
MS. PIANALTO.
But my outlook is conditioned on a federal funds rate path that begins to increase about a quarter earlier than called for in the Greenbook baseline .
MS. PIANALTO.
Turning to inflation , I anticipate that price pressures will intensify further before we see some relief , just as the Greenbook baseline scenario depicts .
The CBO forecast 1.5 percent real GDP growth in 2008 as a whole , followed by 1.1 percent growth in 2009 .
MR. LOCKHART.
Based on my calls with financial market contacts , it seems that -- no surprise -- much of the attention in financial markets has shifted from private fixed-income markets to Fannie and Freddie .
MR. KROSZNER.
The PPI numbers that came out today raised some concerns that some of the good parts of the CPI will not be flowing through to PCE .
Mr. Minnick , '' Mr. Chairman , I wanted to return to the next shoe to drop and the chairman 's concern about commercial real estate .
MS. YELLEN.
Credit losses have risen not only on mortgages but also on auto loans , credit cards , and home equity lines of credit .
MR. PLOSSER.
I note that , absent payback and despite the worsening news , economic growth would be on the order of 2 percent higher .
At the time of our last Monetary Policy Report , the Federal Reserve was confronted with both high inflation and rising unemployment .
MR. POOLE.
I 'm very much of the view that the natural state of the U.S. economy is full employment and output growth at potential .
MR. STOCKTON.
This morning 's data on housing starts also suggest little end in sight to the ongoing recession in housing .
Mr. Bernanke , '' Congressman , first of all , let me just acknowledge the very important problem of the rising cost of health care .
MR. WILCOX.
-LSB- Laughter -RSB- In fact , as we reported to the Board yesterday , Friday 's labor market report came in very much as expected .
MR. LOCKHART.
Regarding the balance of risks , it is early to materially adjust the weighting of GDP downside versus inflation upside risks .
MR. STOCKTON.
Another factor working in the direction of some acceleration in activity is a diminishing drag on spending and activity from the earlier run-up in oil prices .
MR. KAMIN.
30 , MR. KAMIN. , '' For the next couple of weeks , millions of people around the world will be watching the Olympic games in Beijing .
MS. YELLEN.
I would judge that these measures currently fall in a range from a modest amount of slack to a modest amount of excess demand .
VICE CHAIRMAN GEITHNER.
The strength of demand growth outside the United States has been helpful , and we agree with the Greenbook that it looks likely to continue for some time .
In the United States , only five quarters in the past 20 years exhibited declines in GDP , and those declines were small .
MS. YELLEN.
On this score , things look fairly good , with core PCE price inflation at 1.7 percent over the past 12 months .