FOMC Meetings Minutes Are Out: Hoenig Dissents

The minutes for the March 18, 2010 meeting of the FOMC are out. Of marginal note, Fed Governor Thomas Hoening dissented on language, not policy, Got that? From the minutes:

Mr. Hoenig dissented because he believed it was no longer advisable to indicate that economic and financial conditions were likely to warrant "exceptionally low levels of the federal funds rate for an extended period." Mr. Hoenig was concerned that communicating such an expectation could lead to the buildup of future financial imbalances and increase the risks to longer-run macroeconomic and financial stability. Accordingly, Mr. Hoenig believed that it would be more appropriate for the Committee to express its anticipation that economic conditions were likely to warrant "a low level of the federal funds rate for some time." Such a change in communication would provide the Committee flexibility to begin raising rates modestly. He further believed that making such an adjustment to the Committee's target for the federal funds rate sooner rather than later would reduce longer-run risks to macroeconomic and financial stability while continuing to provide needed support to the economic recovery.

Of added note, the Fed Funds rate, on the day the meeting was held, was just in the early stages of its climb higher. The effective Fed funds rate closed at 0.18% on the day of the meeting. It started the month at 0.14% There was no discussion noted in the minutes of the start of the climb.

The full minutes are in the EPJ Vault.