Nearly all members judged that it was appropriate to reiterate the expectation that economic conditions—including low levels of resource utilization, subdued inflation trends, and stable inflation expectations—were likely to warrant exceptionally low levels of the federal funds rate for an extended period. One member, however, believed that continuing to communicate an expectation in the Committee’s statement that the federal funds rate would remain at an exceptionally low level for an extended period would create conditions that could lead to macroeconomic and financial imbalances.
Well one of twelve gets it. Allowing banks to borrow at 0% then "invest" in federal debt at 4% and creating a 3% real rate of return (since inflation is essentially 0%-1%) just might not be helpful huh?
Well I didn't get an economic degree from Stanford but I agree with the lone member of dissent (wonder who it is?).
With economic outlook being poor (thus risk of default high) and banks having ability to make 3% risk free with no consequence WHY WOULD THEY LEND? I sure as hell wouldn't. Oh yeah they aren't lending so it is working exactly as predicted. Inadvertently the fed has created a situation where the most profitable thing for banks to do is not be a bank.
Somehow 11 of 12 members disagree though.
ON EDIT:
"Voting against this action: Thomas M. Hoenig."
I guess Hoenig is the "one member" given he voted against keeping fed funds target at 0% to 0.25%.