07. June 24-25 meeting

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“So, Mr. Chairman, I would say that currently our patient—the economy—is indeed a sick puppy. … I think we have, like loyal practitioners and with the equivalent of the Hippocratic oath, done the job that we are expected to do in terms of resuscitating the victim. That is the good news. The real bad news is that our patient appears to be acquiring a staph infection in this hospital that we have created, and that staph infection is inflation.” -Dallas Fed President Richard Fisher, June 24, discussing inflation concerns

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“I think we face an extended period of relatively weak economic growth, quite weak domestic demand growth, and overall growth significantly below trend. I think this is both likely and necessary. It’s likely because we have more weakness ahead as the housing drag continues, financial headwinds remain acute, the economy adjusts to the very large and sustained energy price shock, the saving rate increases, and global demand moderates. It’s necessary to achieve a reasonable inflation outcome over the forecast period.” -New York Fed President Timothy Geithner, discussing the economy and inflation

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“With respect to financial markets, I agree certainly that the crisis atmosphere that we saw in March has receded markedly, but I do not yet rule out the possibility of a systemic event.” -Chairman Ben Bernanke, June 24, during a discussion of financial markets and stability

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“I’m concerned that households and firms are in a python squeeze of an intensifying credit crunch and a continuing decline in housing wealth as well as pressures from surging food and energy prices. I think the economy has shown resilience so far, and that’s reassuring, but I don’t think it’s assured for the future.” -San Francisco Fed President Janet Yellen, June 25, while discussing the state of the economy