Yesterday, Chairman Bernanke provided a detailed discussion of economic and financial developments and of the Federal Reserve’s policy strategy, so here I will just relate some key points of his discussion to the major themes that I have emphasized today. First, we are proceeding in a timely manner in countering any developments that might threaten economic or financial stability.
The FOMC has not been basing its decisions solely on the incoming flow of economic data; for example, the sequence of interest rate cuts was initiated last fall even though growth in the gross domestic product had been quite strong in the third quarter.