The Chairman's prepared remarks did not deviate much from the tone of the minutes of the June FOMC meeting, not even to acknowledge the further softening in the data since that meeting. We believe that the Chairman tried hard to represent the views of the FOMC, as reflected in the minutes, but, in the process, he sounded a bit out of touch with the data released since the June meeting. On policy, his discussion seemed even less balanced than that of the minutes. It was as if he was a bit out with touch with the Committee too! The oversight committee once again mostly passed on the opportunity to pose probing questions on the conduct of monetary policy. Sadly, only 14 percent of the questions were on monetary policy. If the Chairman seemed a bit out of touch with the data, the oversight committee definitely seemed out of touch with monetary policy!

Note: This post and the original commentary were written by former Fed governor Larry Meyer and former Fed economist Antulio Bomfim.

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Any news about changes in the Chairman’s message delivered in the opening statement of the semiannual monetary policy testimony is deservedly a central focus of the markets. Still, the most amusing part of the testimony and, occasionally, even more informative than the prepared remarks, is the Q&A. Perhaps it is just wishful thinking on our part, but we thought we might try to tilt the odds towards more monetary policy questions this time around by suggesting a list of questions that members of the oversight committees should ask the Chairman. Our views on the Chairman's answers to these questions were outlined in the original commentary.

Let's go straight to our suggested list of questions:

• What is the probability of a double-dip recession?
• Are you concerned about the possibility of deflation?
• Given the FOMC’s forecast of a persistently elevated unemployment rate and very low inflation, why would there be any question about the FOMC resuming easing?
• What is the hurdle or threshold to resume tightening?
• What options does the Fed have should it want to ease?
• Would any of the Committee’s easing options be able to provide meaningful additional stimulus?
• What do you think about the direction of the financial regulatory legislation to remove the Fed’s authority over consumer protection?
• Do you worry about the adverse and potentially dangerous consequences of keeping rates so low for a very long time?
• Do you believe that it is wise for a Fed Chairman to meet with the President and subsequently participate in a press conference with the President in which the President lays out part of his political agenda and indicates that these are points of agreement between himself and the Fed Chairman?
• Do you believe that financial stability should be an explicit third mandate for the Federal Reserve?

Note: This post and the original commentary were written by former Fed governor Larry Meyer and former Fed economist Antulio Bomfim.

Click here to contact Macroeconomic Advisers