MR. LACKER
But I do n't think our problems with inflation are transitory , and I do n't want to lose sight of them in the midst of the current weakness .
MR. KROSZNER
Turning to inflation , as I think a number of people have mentioned , we have n't seen a lot of pressure on the labor side .
MR. HOENIG
For the past four years , core PCE inflation has averaged about 2.1 percent , considerably above the numbers that this Committee has put forward in its long-term projections .
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 .
MR. SHEETS
The final point I 'd like to mention is that , also late last week after the Greenbook went to bed , we received data on import prices .
MS. PIANALTO
Today my forecasts for output and prices are broadly similar to the Greenbook 's for 2009 and 2010 , although I am expecting more weakness in economic activity in the second half of this year than the Greenbook is forecasting .
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. MADIGAN
Many of you also projected that the funds rate would exceed the level forecasted in the Greenbook by the end of the forecast period .
MR. KOHN
But I did n't discount this possibility entirely , reasoning that the extraordinarily depressed business and household sentiment was significant .
MS. LIANG
We also present projections based on the Greenbook recession alternative with the additional assumption that national house prices fall 20 percent .
MR. STOCKTON
Finally , much as we had been expecting , weak domestic demand is receiving some offset from ongoing solid gains in exports .
MR. REIFSCHNEIDER
Overall , we read the incoming 2 The materials used by Mr. Reifschneider , Ms. Liang , and Mr. Sheets are appended to this transcript -LRB- appendix 2 -RRB- .
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. BULLARD
Monetary policy can mitigate the effects of a large shock but can not be expected to completely offset exceptional disturbances .
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 .
MS. CUMMING
In particular , we have looked at inflation expectations as measured by financial markets and feel that the decline that we see in those expectations can not be explained simply by the drop in energy prices and technical factors but look larger than that .
MS. CUMMING
On the weaker economic outlook , we see the intensification of adverse growth coming from many things mentioned already : the unemployment rate increase and the likelihood that consumer spending is going to be negative .
MS. CUMMING
We have long thought that inflation in the medium term will moderate , and we 've been taking some comfort from recent developments that have been cited already .
MS. CUMMING
As part of this -- particularly in the financial sector , I would say -- in our senior loan officer survey we 've seen indications that , even as rates in , say , the mortgage markets start to ease a bit , nonprice terms may still be tightening .
MS. CUMMING
I think that all three of these things are occurring in an environment in which we have massive correction , adjustment , structural change in autos , housing , and financial intermediation .
MS. CUMMING
Coming into this meeting today , we favor alternative B. I would associate myself with the comments of President Stern and President Evans , that if we were , in fact , going to make a move today , it would be better to make a large move of 50 basis points .
MS. DUKE
At the same time , the credit numbers -- or at least the commercial banks ' part of the credit numbers -- do n't look all that bad .
MR. BASSETT
As shown by the blue line , nearly 90 percent of the institutions that originated nontraditional mortgages tightened standards on such loans .
MS. YELLEN
Higher oil prices and interest rates and lower housing prices have led me to modestly reduce my forecast of growth in the second half of this year and next year .
MS. YELLEN
I agree with the Greenbook 's assessment that the strength we saw in the upwardly revised real GDP growth in the second quarter will not hold up .
MS. YELLEN
My contacts also report that their businesses are still raising prices in response to past increases in commodity and import prices that boosted their costs .
MR. MORIN
We expect the higher cost of capital in this forecast to weigh on business capital spending over the projection period .
MR. MORIN
In addition , we cut back the size of the judgmental adjustments for financial turmoil to their September Greenbook levels .
MR. WARSH
I 'm less sanguine than the Greenbook that we 're going to see the power of that inflation fade in the event that the economy softens some .
MS. DANKER
Chairman Bernanke Vice Chairman Geithner President Evans President Hoenig Governor Kohn Governor Kroszner President Poole Yes Yes Yes Yes Yes Yes No ''
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. MISHKIN
249 , MR. MISHKIN. , '' Also an issue that the Chairman raised yesterday was that the housing market is a big component of our downside risk .
MR. LACKER
The real federal funds rate using the Greenbook 's forecast of overall PCE inflation is now between minus and minus percent .
MR. KOHN
Like the staff , I assume that the conditions return to something approaching normal over the next 18 months , but the risks are skewed toward an even longer recovery period .
MR. KOHN
-LSB- Laughter -RSB- I class the risks for both output and headline inflation as greater than usual , and let me tell you about some of the things I wrestled with .