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Federal Reserve emergency conference call, August 16, 2007:

CHAIRMAN BERNANKE:Let me read the statement one more time. I have a couple of thoughts. First, is there a sense that adding the “going forward” is helpful? I believe there was some sense that it was helpful. On President Fisher’s comment about “having increased appreciably,” I think we need an adverb there because we just said in the last FOMC statement that they have increased. So we need to ratchet it up some. We could say “significantly” or some other word, but unless there are other comments, I would recommend staying with “appreciably.” Also I believe that “prepared to act as needed” encompasses the idea of either not moving or moving once or moving twice. I believe that “as” is a
more encompassing preposition, and I would recommend that we leave it as is. If there are no other comments, I think it would be best for us to take a vote of FOMC members on the monetary policy statement for the record. President Fisher.

MR. FISHER. Thank you, Mr. Chairman. Again, I apologize, but if we take “going forward,” which I think is a good suggestion, I do want you to consider the word “appreciably” as maybe a little too strong. We’re saying about going forward. We could say “increased further.”
“Appreciably” is a very strong word, and the way I interpret it from a market perspective—and this is maybe what you want to convey—is that it’s a done deal that we are going to cut rates. That’s the way I interpret it. I think the word “further” is a little softer. I worry about “appreciably.” We are acknowledging that we’re looking forward. I think it is a very good suggestion of Governor Kroszner’s. I just wanted to make that point, Mr. Chairman. Thank you.

MR. KOHN. “Further” is pretty soft.

CHAIRMAN BERNANKE. “Significantly”?

MR. KOHN. “Significantly further”? I’m sorry, Mr. Chairman.

CHAIRMAN BERNANKE. Go ahead.

MR. KOHN. Okay. People have been concerned that this will disappoint the markets, so softening it appreciably [laughter] to me might be a problem. If we said “further,” I think we would need an adverb in front of it.

CHAIRMAN BERNANKE. President Lockhart.

MR. LOCKHART. I agree with President Fisher regarding “appreciably,” and I’m wondering if we could not say that the Committee judges that the downside risks to growth have increased somewhat.

CHAIRMAN BERNANKE. No, sorry. That’s not strong enough.

MR. KOHN. You could say “significantly further.” Substantially?

CHAIRMAN BERNANKE. Materially?

MR. HOENIG. You might as well stay with “appreciably.”

CHAIRMAN BERNANKE. I think the best alternative is “significantly,” if that’s preferred. No? “Appreciably” simply means that it’s detectable, large enough to detect.

MR. WARSH. Detectable and material, significantly.

MR. LACKER. Noticeably?

MR. HOENIG. Mr. Chairman, my first choice would be “further,” but I’d take “appreciably” over “significantly.”

CHAIRMAN BERNANKE. Okay. I think we’ve reached the limit of our ability to craft it.
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