The January FOMC meeting will be notable in how the FOMC statement and Powell’s remarks will incorporate the new FOMC consensus to proceed with “patience.”
▪ Recent communications suggest there is quite a strong consensus for a pause in rate hikes at the March FOMC meeting, and the market sees very little probability of a March hike.
▪ We expect them to retain the forward guidance referring to the FOMC’s expectation that further rate hikes will be appropriate, language that they tweaked, but essentially retained, in December. Removing this now would be a confusing signal, given that the outlook hasn’t changed that much since then.
▪ However, we expect the statement to be adjusted to include some version of the “patience” theme that has been featured in remarks by virtually all FOMC policymakers this month. Additional language to this effect would be consistent with FOMC participants’ desire to move the statement further toward emphasizing data dependence and flexibility.
Downside risks will feature prominently in Powell’s press briefing.
▪ Powell’s remarks will likely follow very closely his recent public remarks, in which he expressed considerable optimism about the economic outlook and hope that the downside risks concerning markets would not prove as impactful as feared.
▪ Despite this optimism and what seemed to us to be an almost dismissive attitude toward the concerns roiling markets, his remarks were not interpreted as hawkish because of his overwhelming emphasis on the FOMC’s ability and willingness to be patient as it waits for the incoming data to confirm that the outlook remains intact.
▪ One new risk that has materialized since the December meeting is the partial government shutdown, now on pause for a few weeks through a temporary funding deal. Powell is likely to reiterate his recent remarks that previous shutdowns have not seemed to have had more than a temporary effect on real GDP but that we don’t have experience with a shutdown as long as this episode. He’ll also note that some data releases have been postponed because of the shutdown and that this has obscured to some extent the economic picture.
▪ A key reason that FOMC can be patient is that the inflation outlook is muted. In a recent speech, Clarida departed from the messaging of other policymakers by noting that “inflation has surprised to the downside recently, and it is not yet clear that inflation has moved back to 2 percent on a sustainable basis.” We expect Powell to stick to his recent messaging, which is that inflation is close to its objective and is expected to remain near its objective.
Observers have been focused on the prospect that the FOMC might adjust its balance sheet normalization plans, and FOMC participants will certainly continue their discussion of balance sheet issues at this meeting. However, a major announcement is unlikely, and any updates next week would likely emerge in the press conference and not the statement or accompanying implementation note.
▪ The most recent normalization principles indicated that a material deterioration in the outlook is the standard for making changes to the runoff program. That standard has clearly not been met. ▪ Policymakers have expressed more openness to revisiting aspects of balance sheet runoff in light of financial market concerns in recent months, but they haven’t indicated that they’ve seen the evidence necessary to validate those concerns. We don’t expect that to lead them to adjust the pace of runoff next week.
▪ Judging by policymakers’ public remarks and the minutes, this meeting seems too soon to be making final decisions on the ultimate size and configuration of the balance sheet, as well as how to perhaps adjust runoff as part of the transition.
▪ The statement is highly unlikely to feature any news on the balance sheet. However, at his press conference Powell could reiterate the FOMC’s commitment to the stated normalization plans while noting that, even under the current principles, the FOMC could adjust the plan in accordance with changing circumstances.
▪ It’s clear that there is a consensus for remaining in a system of abundant reserves. An official announcement has not yet been made, however. We think the FOMC should go ahead and announce what we already know, but they probably won’t do it next week.
Powell, along with all other FOMC participants, points to the unambiguous evidence that economic circumstances today are very favorable. What’s not to like? Growth well above trend, still very strong employment growth, modestly rising wages, and low unemployment rate, and muted inflation. Definitely worth celebrating and especially welcome by participants who are highly data-dependent. The Committee seems to be more forward-looking, and the difference today between the backward-looking and forward-looking perspectives appears great indeed. The key features of our forecast are GDP growth slowing, an unemployment rate that is declining, then stabilizing, then rising, and inflation muted. While the backward
looking perspective calls for gradual further increases in the fund’s rate, the forecast points to more caution. Of course, the forecast is underpinned by additional hikes, which take the funds rate into restrictive territory. That is a dangerous place to be, given that what we refer to as the rate gap–the difference between the actual real fund’s rate and its estimated neutral rate–is a good predictor of recessions.
Sharply Slowing Growth
In their December macro projections, participants projected that growth would slow from 3% in 2018 to 2.3% in 2019 and then to 2% and 1.8% in the following two years, respectively. Our forecast is qualitatively similar. This is a slowing from well above trend to slightly below trend, with a sharper slowing in 2019 and a more gradual downtrend thereafter. In this case, the trend does not look like your friend. The sharp slowing in growth in 2019 primarily reflects a projected moderation in consumer spending and business fixed investment relative to 2018, when both were quite strong, likely boosted significantly by fiscal stimulus.
Unemployment Rate Falling, then Stabilizing, then Rising Gradually
The unemployment rate is projected to follow a path in line with the gap between real GDP growth and its trend rate. Real GDP growth begins well above trend, and the unemployment rate falls. Then, after some moderation in real GDP growth, to the point where it is a near trend, the unemployment rate stabilizes. Finally,
real GDP growth dips a bit below trend, and the unemployment rate edges upward, back toward the estimated NAIRU. This is a hopeful, smooth forecast for the unemployment rate, with little historical precedent: When the unemployment rate rises even that much, there is usually no turning back. A recession typically follows.
Inflation continues to be muted. Indeed, participants generally seem more concerned with inflation being below 2% in the near term rather than above. While 12-month core PCE inflation has remained within a couple of tenths of 2% since early 2018, more recent monthly readings have been softer. This pattern of monthly readings means that, even if future readings are close to 2%, as we expect, the 12-month rate will edge down in the first half of 2019 due to base effects before rising back to 2% in the second half. FOMC participants project 2% inflation every year from 2019 to 2021, whereas we have inflation gradually moving up to 2.2% in 2020 and 2021. That modest overshoot would be of little concern to the FOMC, in light of the symmetric inflation objective and a growing inclination toward targeting average inflation.
Changes Since the December FOMC Meeting
To recap, at the December meeting, FOMC participants were looking at incoming data that were consistent with the economic outlook. However, markets had grown concerned about a number of factors, including data indicating a slowing in growth in foreign economies and the possibility that the U.S. economy was experiencing or about to experience a slowing that hadn’t yet appeared in the data (perhaps because of trade tensions). As a result, volatility had increased sharply. While FOMC participants generally saw these as risks to the outlook, not as directly warranting changes to the outlook, the fact remained that financial conditions had tightened meaningfully. Moreover, the increase in concern about downside risks could itself affect the economic outlook because it represented a shift in sentiment. FOMC participants reduced their expectations for further tightening, essentially offsetting the effect of the tightening in financial conditions, and the forecast was little changed.
What’s happened since then? Shortly after the December meeting, equities had declined even further and the partial government shutdown began. However, since then equity prices have risen fairly steadily, and they are now meaningfully higher than at the December FOMC meeting. Markets have settled down somewhat. The partial government shutdown became the longest ever, and though the government will open for a few weeks because of a temporary funding deal, it doesn’t look like the underlying issues have been resolved. For now, however, the assumption is likely to remain that its primary effect is likely to be a temporary reduction in GDP that is made up later. Perhaps the postponement of some data releases due to the shutdown could motivate the FOMC to refer to “available” data in the statement. There have been some worrisome hints in the incoming data, such as a decline in the December ISM index and the Michigan measure of consumer sentiment, but overall the data, particularly another strong labor market report, suggest the economy remains strong. On balance, things look different, but not much better or much worse–if anything, perhaps a bit better than in late December, given that financial markets have calmed down somewhat.
Are the Risks Still “Roughly Balanced”?
While the FOMC continued to describe risks to the economic outlook as “roughly balanced” in its December statement, the FOMC’s focus today is overwhelmingly on downside risks, which seem to be more numerous and to have more severe potential consequences than the upside risks to the forecast. (We discuss the balance of risks in the context of the statement later in this Briefing.) Indeed, Brainard recently made this point quite clearly: “All of those things [shutdown, trade, EU] are risks that if they were to materialize would be negative for the economy, we’re not seeing as much risk out there that would be a positive surprise.”
The FOMC’s policy stance is fairly clear at this point, and FOMC participants, after a rough Q4 for Fed communications, are likely more comfortable with their messaging than they have been in some time. It’s quite clear that the FOMC will pause rate hikes in March rather than maintain the recent pace of one hike per quarter (hikes at each meeting with an updated SEP and a post-meeting press conference). Given that there isn’t any pressure to head off too-high inflation, the FOMC’s priority is extending the expansion, and for now, that means waiting to see the data confirm that the downside risks concerning markets haven’t materialized and derailed the outlook. While we think we have a good idea of what the overall message from this FOMC meeting is likely to be, there’s a lot of uncertainty about specific changes to the statement language, particularly given the changes the FOMC made in December. As for the balance sheet, we don’t expect any announcements on changes to the runoff plan, although Powell’s press conference could reveal increasing openness of the Committee to adjusting the plan.
January is Not a “Live” Meeting (Not That It Matters, in This Case)!
First, a note on “live” versus “off” meetings. Of course, there won’t be a rate hike next week. But even if the FOMC were more sure about further rate hikes, January is an “off” meeting. OK, a bit more alive than was previously the case with non-SEP meetings, now that all meetings will be followed by Powell press conferences. Of course, there can be moves at off meetings, especially if there are pressing risk management reasons. But, if the Committee plans to raise rates only a couple of times over 2019, for example, there would be no reason for urgency supporting a rate hike at a given non-SEP meeting.
Changes to the December Statement Complicate the Crafting of the January Statement
Prior to the December FOMC meeting, the minutes had indicated that the FOMC wanted to move away from forwarding guidance about future funds rate hikes, the “further gradual increases” language. But rather than remove that language entirely, they just tweaked it. In particular, in December they added “some” before “further gradual increases.”1 So now they still have to consider what to do with this language at each meeting. The other significant change to the December statement was to the language on the balance of risks, which had been described for some time as appearing “roughly balanced.” They retained that portion but added the qualifier that the FOMC “will continue to monitor global economic and financial developments and assess their implications for the economic outlook,” a nod to perceptions of increased downside risks.
Statement Likely to Continue to Reference Further Hikes…
For some time the FOMC has been becoming increasingly uncomfortable with its forward rate guidance. But that was also the case in December, and they didn’t remove it then. In fact, December was a more natural time to remove that language in the sense that it was a meeting with a hike and updated rate projections showing further projected hikes. If they were to remove this reference now, it would raise questions about whether the FOMC’s outlook had deteriorated so significantly since the December FOMC meeting that they thought the language was no longer accurate. Any changes to the outlook since the December meeting certainly haven’t been sufficient to shift the consensus for further rate hikes so significantly.
Perhaps the strongest argument for removing the forward guidance is that keeping it could be seen as inconsistent with the apparently strong consensus to pause in March. While the market has come to associate “gradual” with the recent pace of one hike per quarter, it really means a pace of more than one but no more than four hikes per year, based on past usage. So there’s no inconsistency, in this strict sense, with retaining this language while expecting a March pause.
…But Tweaks to the Forward Guidance Likely
There’s no doubt that circumstances are different than they have been in some time, with the next “live” meeting now likely to feature a pause. So while we think they’ll keep a reference to further rate hikes, we think it’s likely they’ll change this paragraph to emphasize that they are patiently waiting to see the data confirm that another hike is appropriate. Indeed, the minutes of the December FOMC meeting hinted that further changes to the forward guidance were likely to be under consideration at future meetings: FOMC participants discussed how to convey their data-dependent approach, such as “options for transitioning away from forwarding guidance language in future postmeeting statements.” “Several,” thought the FOMC could, “over upcoming meetings [plural] to remove forward guidance entirely and replace it with language emphasizing the data-dependent nature of policy decisions.”
“Patience” = Pause, But Maybe for the Statement the FOMC Will Prefer A Word With Less History
The minutes of the December FOMC meeting included a paragraph on participants’ discussion of the outlook for monetary policy that indicated to us that a March pause was likely. Most important was the sentence, “Against this backdrop, many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming” (italics our emphasis). Since then, virtually every participant who has talked since the last meeting has repeated the same word to describe their policy position: “Patient.” So we know what they are going to do. And there is a strong case for doing so.
We think they’re likely to adjust the forward guidance to give a nod to data dependence and (implicitly) the likelihood of a March pause, and the recent prominence of the word patience makes it a natural candidate for inclusion, so we’ve included it in our baseline guess of the January statement. In particular, following the line about expecting “some further gradual increases,” they could add a sentence like this: “Given the economic outlook and the amount of monetary accommodation that has already been removed with previous increases in the target range for the federal funds rate, the Committee judges that it can be patient as it assesses whether adjustments to the stance of monetary policy are appropriate.”
We think there’s a substantial probability that they’ll opt for other, essentially similar, language, however, given the FOMC’s history with the word. “Patient” has been in the statement in two different episodes, in 2004 and in late 2014-early 2015. In both cases, “patient” was used to replace references to a period of time (“considerable period” in 2004 and “considerable time” in 2014). So the idea with both of these changes, as described in the January 2004 minutes, was to be clear “that a move away from the current degree of policy accommodation would depend on economic conditions rather than simply on the passage of time.” That fits with current circumstances just fine.
But there has previously been some guidance about what “patient” meant in terms of a likely amount of time. Recall that the last time the statement cited patient, it was in the context of being patient awaiting the beginning of normalization: “Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy.”
The December 2014 minutes explained that “Most participants thought the reference to patience indicated that the Committee was unlikely to begin the normalization process for at least the next couple of meetings.” (Of course, they ended up being “patient” for a full year, only raising rates in December 2015.) Again, that fits with current circumstances just fine, but it seems reasonable that the FOMC might prefer to use a new language to make clear that this is not related to the previous usage.
In addition to patience, the key policymakers (Powell, Clarida, Williams) have used a number of other related terms and phrases. For example, Williams said: “The approach we need is one of prudence, patience, and
good judgment. The motto of ‘data dependence’ is more relevant than ever.” So the FOMC has many options for its wording. In any case, even if it doesn’t show up in the statement, “patience” will certainly be one of the talking points that Powell will emphasize during his press conference.
Likely to Keep Calling Risks “Roughly Balanced” Despite Obvious Tensions
In December, the FOMC continued to call risks to the economic outlook “roughly balanced,” but they gave a nod to concerns about downside risks by adding language to the statement that it “will continue to monitor global economic and financial developments and assess their implications for the economic outlook.” That new language is likely to stay since those concerns haven’t been resolved since then.
We also think they’re likely to keep calling risks “roughly balanced” despite FOMC participants clearly being more focused on downside risks rather than upside risks. They did so in December, and risks to the outlook don’t seem to have worsened significantly since then. The FOMC appears to be comfortable with a broad interpretation of “roughly balanced.” The one exception is the partial government shutdown. However, at this point, FOMC participants won’t see the shutdown as anywhere close to affecting the outlook beyond the very near term, so they’re unlikely to change this language because of that.
Minimal Changes to First Paragraph of Statement
There will be changes to the first paragraph of the statement, which describes the incoming data, but these are likely to be minor. It’s uncertain what exact wording the FOMC will choose, but in any case, we don’t expect their decisions on the exact wording to affect how we see the outlook for monetary policy. The FOMC still only has GDP data through Q3, so we think they’ll continue to say that economic activity has been rising at a “strong” rate. What they’ll do with the language on household spending and business fixed investment is unclear. In the past, they’ve tended to describe the pace of growth of both together or describe separately the pace of growth of one and the change in the pace of growth of the other. The latter is what they did in November and December 2018 (“Household spending has continued to grow strongly, while the growth of business fixed investment has moderated from its rapid pace earlier in the year.”). We think they’ll keep that description of household spending, but the description of BFI growth as moderating since earlier in 2018 seems a bit dated–though we don’t have another quarter of BFI data since they used that description. To move away from that, they could describe BFI growth as “solid,” which seems like a pretty safe choice. This would involve describing the pace of growth each separately, of course, which the FOMC has tended not to do. In our guess of the statement, we’ve also added the language “Available data suggest” to the beginning of this sentence as an illustration of what the FOMC could do as a nod to the fact that there has been limited new data since the December meeting, in part because of the partial government shutdown.
We don’t expect changes to the language in the labor market. The unemployment rate rose two-tenths, to 3.9%, in December. However, we think they’ll follow their own precedent from 2018 and avoid referring to this one-month rise, opting instead to continue to say that the unemployment rate “has remained low.”
We likewise expect no change to the language on inflation and inflation expectations. They didn’t change the language on inflation expectations (“Indicators of longer-term inflation expectations are little changed, on balance”) despite a decline in breakeven inflation rates, so they’re unlikely to do so now.
Statement on Longer-Run Goals and Monetary Policy Strategy
Each year at its January meeting the FOMC considers changes to the Statement on Longer-Run Goals and Monetary Policy Strategy. We don’t expect any significant changes, likely just a necessary update to the reference to participants’ median projection for the unemployment rate in the longer run. Changes are especially unlikely given that this is the year that the FOMC will be conducting its review of strategy and communications. It wouldn’t make much sense to change this document, which has been quite static in recent years, right before undertaking this review.
Balance Sheet Considerations
An announcement that the FOMC intends to stay in an abundant-reserves regime could come at any time. It’s clear that that is what the FOMC intends to do. Indeed, we think such an announcement should have been made already! However, we don’t think we’ll get that announcement next week, and any other decisions are even less likely.
The January FOMC meeting is too early to be making changes to the balance sheet runoff. The latest normalization principles specified that the hurdle for changes to runoff plans is a “material deterioration” in the economic outlook that would necessitate a “sizable reduction” in the fund’s rate. While the outlook has weakened and downside risks appear more relevant, it has not deteriorated nearly to that degree, of course. FOMC participants have acknowledged market concerns about balance sheet normalization and emphasized that they are willing to adjust runoff if it’s clearly causing problems. However, they have also indicated quite clearly that they don’t see the reason for adjustment at this point. While we don’t expect changes to runoff to be enacted at this meeting, discussion about runoff will certainly be on the agenda. The NY Fed surveys of the market participants asked for estimates of the effects of the runoff caps on Treasury yields and term premiums, MBS spreads, and broad equity indexes. In particular, the NY Fed wanted to report on why the caps’ impact for this year would differ from that of 2018.
The discussion from the December meeting indicated that the FOMC has not reached a consensus on key issues, such as the ultimate configuration of the balance sheet, so we’re even less likely to see any decisions on longer-run operational issues. A key question is the equilibrium level of reserves. The FOMC is leaning toward abundant reserves, although a final decision has not yet been made. The survey that the FRB conducted in Q4 indicated that the aggregated lowest comfortable level of reserve balances of survey respondents was “just over $600 billion.” But the December minutes cited NY Fed surveys that indicated higher 2025 equilibrium levels–$1.1 trillion on average. Furthermore, policymakers thought that providing “a buffer of reserves sufficient to ensure” being in the flat portion of the demand curve could be appropriate.
In the event that they do announce an official update to their balance sheet plans, they would probably release an addendum to the normalization plans that would appear on the Fed’s website on Jan. 30, 2 p.m. (same time as the statement). The previous addendum, in June 2017, was released after a meeting that had a press conference; now, Powell will speak after every single meeting, so that constraint is no longer binding.
Powell’s Press Conference
Throughout the intermeeting period, Powell has remained optimistic about the outlook. He almost seemed unperturbed about downside risks in comparison with some other policymakers. He paired this optimism with lots of dovish language about being patient, however, which removed worries about the potential for a March hike. So his speeches haven’t been seen as hawkish, despite his optimism. This same dynamic will likely be in play at his press conference next week. He’s likely to continue to express optimism, but there’s unlikely to be the sort of negative market reaction that there was to his December press conference. Perhaps it helps that there won’t be updated SEP projections for this meeting, so he has less explaining to do.
Powell’s broad message on downside risks will likely be little changed from his recent public comments. However, we think he’ll be a least a little less expansive in his remarks next week, at least on certain topics: Powell surprised us with his willingness earlier this month to discuss aspects of these risks in such a forthright manner, particularly his views on the Chinese economy and the effect of trade tensions on the U.S. and Chinese economies.
He’ll say that the FOMC is continuing to assess these risks closely, and he certainly won’t say that these have been resolved. Indeed, the NY Fed wants to discern the extent to which rate and equity volatility in 2018:Q4 (and late December in particular) was caused by various factors, including the change in the outlook and uncertainty for U.S. and foreign economies, changes in perceptions of the FOMC’s reaction function for
both rate and balance sheet policies, actual changes in global central bank balance sheets, geopolitical uncertainty, and technical factors. He may note that financial markets seem to have stabilized more recently, perhaps suggesting that concerns about these risks have at least not increased further since December. But he really won’t want to be seen as declaring victory on this front.
One new negative development since the December FOMC meeting is the partial government shutdown, now on hold for three weeks because of a temporary funding deal. Powell will say that shutdowns generally have a meaningful negative effect that is then reversed once the government reopens, with little effect on the longer-term outlook. However, he’ll note that this shutdown has been longer than previous episodes and that the effects of a prolonged shutdown are uncertain.
Powell will be certainly be asked during his press conference to address the uncertainty around the balance sheet more comprehensively. It is unlikely he will divulge any information beyond what was in the December minutes, for example, the likely width of the possible reserve buffer, unless discussion on this issue progressed substantially this month. When asked about the ultimate size of the balance sheet, he’ll likely reiterate the message in his recent remarks that it will depend on the public’s demand for reserves as well as other liabilities: “That would depend on the public’s appetite for liability. Specifically currency, that’s a liability. Also reserves and other liabilities. It will be substantially smaller than it is now. What is it now? A little under 4 trillion. It was 1 trillion before the crisis. It will be smaller than what it is now but nowhere near what it was. Currency was well less than 1 trillion before that started. Now it is up.”
(Statement guess on next page.)
Our Guess of the Statement
Information received since the Federal Open Market Committee met in
November December indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Available data suggest that household spending has continued to grow strongly, while the growth of business fixed investment has moderated from its rapid pace earlier in the year been solid. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. Given the economic outlook and the amount of monetary accommodation that has already been removed with previous increases in the target range for the federal funds rate, the Committee judges that it can be patient as it assesses whether adjustments to the stance of monetary policy are appropriate. The Committee judges that risks to the economic outlook are roughly balanced, but will continue to monitor global economic and financial developments and assess their implications for the economic outlook.
In view of realized and expected labor market conditions and inflation, the Committee decided to
raise maintain the target range for the federal funds rate to at 2-1/4 to 2‑1/2 percent.
In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.
Voting for the FOMC monetary policy action was: Jerome H. Powell, Chairman; John C. Williams, Vice Chairman;
Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; Esther L. George; Mary C. Daly; Loretta J. Mester; Randal K. Quarles; and Eric Rosengren.
Appendix: Administrative/Routine Matters at January FOMC Meetings
January meetings usually involve the annual extension/reaffirmation of some operational policies.
My favorite part of the January meeting is the nomination and vote on the Chair and Vice-Chair of the Committee. The Chair of the Board and President of the NY Fed are not, by statute, the Chair, and Vice-Chair, respectively, of the FOMC. Rather, each January, nominations, and votes are taken for each position. Still, the smart money is obviously on Powell and Williams.
There is also the changing of the guard at the January meeting when four of the presidents typically are replaced by other presidents on the Committee. We love tradition, but this one is over-interpreted. We see “consensus” in Committee decision-making meaning consensus among all participants, not just among the members of the FOMC, those who actually cast votes. Nevertheless, presidents only vote if they’re on the Committee, and since the Chair generally prefers fewer dissents, especially no more than two, presidents on the Committee have slightly elevated importance. At next week’s meeting, Presidents Bullard, Evans, George, and Rosengren will replace Barkin, Bostic, Daly, and Mester on the Committee. The result is a Committee that essentially about the same on the net, and in any case, we don’t expect this to affect policy.