Diane Swonk Fed Quotations

We are at a time in the cycle when you don't need to just turn down the flames on the fire, you have a pot that is already boiling. What the Fed is concerned about is that even as you begin to turn down the flames that pot will still boil over.

We have seen a softer tone in their write-ups. I think there is a real sense that the Fed is going to stay on the sidelines.

It confirms that the Fed is almost done. Those looking for higher rates are not looking at the economy the same way as the Fed.

Like what the Fed has suggested, the U.S. economy was more than strong enough to absorb the blows of Katrina. The labor market is still pretty resilient.

I think this is clearly the Fed saying 'we're willing to take out an insurance policy, we're not willing to risk recession',

There are many who, on a theoretical basis, would argue that now is the time the Fed should begin pulling back because we'll be feeling the bulk of the rate cuts when we already should have started tightening again.

What can the Fed do about WorldCom? This is not an interest rate problem. This is not something they should be involved with, ... I'm sorry, Wall Street, but you can't look to the Fed to save you when they don't have the tools to save you on this one.

What the Fed told us today is, we don't think we are done yet and we are not sure when we will be done.

There's a difference between good growth and bad growth at this stage of the cycle and this is clearly not the kind of inflationary growth that the Fed gets overly concerned about,

There's no question that, given the right circumstances, the Fed wouldn't hesitate to spend 175 basis points. But they really have to have a good reason to put an insurance policy out there.

After the fireworks we've seen coming out of Washington on Friday and Monday, I think the Fed would like to be the least bit of news this week.

A limited statement would be more productive because the Fed is trying to deal with psychological issues. They want the focus to be on their action, not their words.

This is not much of a surprise. We've got a Fed saying growth is strong, but they're still hedging against a downturn. This is a Fed waiting to see the whites of the eyes of recovery.

They're now looking at the demand trade-off on oil prices, not just the inflation trade-off, which will make Fed policy much more complicated. It's a subtle but important change.

It's about the Fed being more communicative with the markets, ... won't just be walking into Greenspan's shoes.

It's my guess the Fed will probably move to the sidelines until at least November,

The minutes confirm the Fed is almost done (raising rates).

I view the risk as very high that the Fed shifts its bias to tighten (interest rates) sooner than we had forecast. The risk is rising that they will move sooner.

The Fed will sit on its hands. There's really no reason to do otherwise. The economy's falling into place as the Fed thought -- it's in a soft spot, with some light at the end of the tunnel.

The Fed wants to see whether this July data, this bad economic data, was an aberration, and two months will make it clearer. If they see more instability in financial markets, they will take it lower.

The Fed is willing to overshoot the mark. I want to underscore that we're catching up. We're getting the market back in line, but we're not going to see positive earnings from that until we get into the third quarter,

The Fed doesn't want to be dealing with the old economy, with deficits returning. They're trying to have some impact on decisions made now without getting us into permanent problems.