MR. POOLE
Fourth , I do n't think there 's any doubt that energy prices are having a significant effect on the purchasing power of , let 's say , the lower half of the income distribution .
MR. STOCKTON
-LSB- Laughter -RSB- Only time will tell if these indicators are giving us a head fake or are the start of our long-awaited slowdown in this sector .
MR. KOHN
In that regard , at some point rising short-term rates -- and recently long-term rates -- should take their toll on housing price appreciation .
MR. KOHN
And the positive contribution to final sales from net exports in the second quarter appears to be a short - term quirk in either data or behavior .
MR. KOHN
In my view , although the risks have shifted a little , they have not shifted enough to throw us off our presumed policy path of measured increases in interest rates , and I would continue to indicate that in our statement .
MR. LEHNERT
As I noted earlier , recent anecdotal reports have highlighted a second potential risk lurking within mortgage markets -- the sudden popularity of interest-only mortgages .
VICE CHAIRMAN GEITHNER
Will this dramatic rise in energy prices over the past two years cause more substantial damage to business and consumer confidence ?
MR. POOLE
It 's much easier for me to imagine a 1/2 point forecast error with inflation coming in on the high side , rather than the low side , of the point forecast .
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
In addition , the Board 's index of industrial production continued to show above-trend gains in manufacturing sector activity .
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 .
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 implementing this simulation , we have assumed that financial markets have already incorporated this expectation , and thus there is no additional effect on asset prices .
MR. STERN
I 've had a lot of experience doing those kinds of June 29-30 , 2005 131 of 234 the underlying dynamics or interactions of the price performance .
MR. KOHN
Still , a number of factors seem to be working to restrain tendencies for inflation to move higher , and we ca n't ignore those .
MR. KOHN
It will give us more opportunities to assess the effects of past tightening moves when we know that those effects can vary and will occur with a lag .
MR. STOCKTON
Our projection incorporates some acceleration in wage inflation in response to higher price inflation this year and a gradual tightening of the labor market .
MR. STOCKTON
The increase in core finished goods -- at 0.1 percent -- and the increase in core intermediate materials -- at 0.5 percent -- were right in line with the Greenbook projection .
MR. STOCKTON
We do not yet have sufficient evidence to conclude that the decline observed in past exchange rate pass-through is being reversed .
MS. JOHNSON
-LSB- Laughter -RSB- I 'll have to admit that we face more than the usual challenges in the period ahead .
MS. MINEHAN
Employment growth should return to its pre-Katrina monthly pace , and the remaining slack in the U.S. economy should wane .
MR. GUYNN
The latest numbers on third-quarter GDP were a bit better than I expected and describe what I , too , would characterize as a solid expansion .
MR. KOHN
So if we see inflation moving , we 've got to do something about that , whereas we 're not responsible for the relative prices of houses or equity and other things .
MR. KOHN
The pre-Katrina data themselves suggested some potentially interesting questions about the outlook , which could have implications for policy going forward .
MR. LACKER
Nor do I think we could count on inflation expectations to gently drift back down after surging as the Greenbook expects -- at least not without forceful action on our part .
MR. LACKER
One would expect most of the pass - through to take a couple of months to materialize , however , and in that regard there are several unsettling signs worth noting .
MR. LACKER
And the Greenbook expects real GDP to average above 3 1/2 percent through the end of 2006 , slightly faster than potential .
MR. LACKER
To me , the most striking revision in the June Greenbook was the 0.2 increase in the projected path for core PCE inflation through 2006 .
MR. REINHART
Current futures rates are consistent with a median probability that you will have halted policy firming by the September meeting .
MR. SANTOMERO
The third-quarter preliminary GDP figures showed broad-based strength in consumption and fixed investment growth , with strong productivity gains .
MS. YELLEN
That is equivalent to saying that the equilibrium real fed funds rate is unusually low -- 1.4 percent in the Greenbook path .
MS. YELLEN
These include the oil shock , the deterioration in the trade balance , and the still low level of investment spending relative to GDP .
MS. YELLEN
On this score , things look fairly good , with core PCE price inflation at 1.7 percent over the past 12 months .
MS. YELLEN
The Greenbook forecast depicts an almost textbook scenario of an economy continuing along the path toward a rather attractive steady state .
MR. KOHN
That would , if it 's true , support the staff forecast ; but it has n't shown through in actual prices paid by consumers as of yet .
MR. KOHN
And house price increases , working through the wealth channel and as an inducement to construction , should be less of a stimulus to demand in the future , though how much and how fast is a very open question .
MR. KOHN
Interest rates have moved higher ; in response the exchange rate has firmed and stock prices have dropped a little .
MR. KOHN
I 've defined accommodative for my own purposes as too low -LSB- laughter -RSB- -- too low to accomplish my objectives .