Given the extraordinary economic environment and the extraordinary actions taken, we find ourselves operating outside the usual and comfortable policy framework, with less consensus among economists about the right actions to take to promote sustainable growth and price stability. As a result, it is not surprising that debates about policy have been robust, with bright and talented people on every side. Thus, it should not be surprising — indeed, it should be reassuring — that debates within the FOMC are similar to many that are carried out in more public forums.

I stumbled upon a quote by the not-so-well-known French essayist Joseph Joubert from two centuries ago, but since I liked the quote, I thought I’d share it with you even if he isn’t a household name: “It is better to debate a question without settling it than to settle a question without debating it.”

Debate serves to enhance the Fed’s credibility and transparency as an institution. We should acknowledge the debate as a healthy process that analyzes the costs and benefits of various policy choices and ultimately leads to more informed and well-thought-out decisions. Communicating the thoroughness of those discussions is a vital part of the accountability we owe the public.

Because the situation has been so fluid and so uncertain in its effects, the speeches of individual FOMC participants have given varied interpretations of the developments and their implications for policy.  The resulting dispersion of messages has bothered market participants seeking clear, unambiguous guidance about the views of the central bank.  The public should understand that the FOMC members do not coordinate schedules and messages, and that members' views are likely to be especially diverse when, as in the current situation, circumstances are changing quickly and are subject to many different analyses.  The diversity of views on the Committee is one of its strengths and vital to arriving at sound decisions.  

"President Poole is speaking for himself and not for the committee."

As reported by the Wall Street Journal after President Poole's public objections to intermeeting rate cuts:  http://www.wrightson.com/federal_reserve/fedspeak/item/3135

Participants other than the Chairman express their own views in speeches. These speeches often may seem to reflect a “party line” but are rarely centrally coordinated in any way. In my experience, the only time there has been a real effort to coordinate public comments by the participants was in the late summer of 1998. At that time financial markets were skittish as a result of the Russian default and financial troubles of Long-Term Capital Management. I recall an informal gathering in the late summer of 1998 with Chairman Greenspan and a couple of other FOMC members when the chairman made a request that we say very little given the rather tense state of the markets as the LTCM situation unfolded.

MS. FOX{of the FOMC secretariat}.  Thank you both for saying that. I think everybody already has said the right thing, which is to refer monotonously to this public statement--to use those words over and over.  They become a mantra and then everyone gets the same story all the time.

....

CHAIRMAN GREENSPAN. Let me make one comment about the mantra issue. Bob Rubin used the mantra about the strong dollar to a point where all of us who had to sit and listen invariably cringed more and more as the weeks and months went on. It turned out to be exactly the right policy approach because what happened was that by not varying the statement, an issue never arose about whether a comment involved a subtle change or not in the policy toward the dollar. It was boring, it was dull, it was repetitive, it was nonintellectual, and it worked like a charm. So I would suggest to you that your inclinations to be thoughtful, conceptual, and interesting be suppressed.