FACTBOX: Fed policymakers' recent comments

CHICAGO (Reuters) - The following is a summary of recent comments by Federal Reserve policy-makers:

* Denotes 2008 voting member of the Federal Open Market Committee, which sets U.S. monetary policy.

FOMC STATEMENT, DEC 16:

"The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 0.25 percent.

"Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

"Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.

"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

"The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant.

"The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity."

* PHILADELPHIA FED PRESIDENT CHARLES PLOSSER, DEC 2:

"The Fed must credibly commit to preventing sustained deflation from becoming widely anticipated, just as it must prevent sustained inflation from becoming widely anticipated."

ST LOUIS FED PRESIDENT JAMES BULLARD, DEC 2:

"I don't think the risk (of deflation) is that high right now. I do think that the inflation expectations are very fluid right now. The big challenge for the Fed is to keep these under control."

* FED RESERVE CHAIRMAN BEN BERNANKE, DEC 1:

"Although conventional interest rate policy is constrained by the fact that nominal interest rates cannot fall below zero, the second arrow in the Federal Reserve's quiver -- the provision of liquidity -- remains effective. Indeed, there are several means by which the Fed could influence financial conditions through the use of its balance sheet, beyond expanding our lending to financial institutions. First, the Fed could purchase longer-term Treasury or agency securities on the open market in substantial quantities."

CHICAGO FED PRESIDENT CHARLES EVANS, NOV 21:

"Committee members also noted that the degree of uncertainty about the outlook was unusually high. In large part this reflects the wide range of possible outcomes for the financial crisis and the associated interactions with the real economy. Personally, I thought it was easier to envision the bad-outcome scenarios than the good ones. Most of my colleagues agreed, and so viewed the risks to the forecast as being skewed to the downside."

RICHMOND FED PRESIDENT JEFFREY LACKER, NOV 21:

"Many analysts expect the U.S. economy to regain positive momentum some time in 2009. That strikes me as a reasonable expectation.

"It may seem premature to be worrying about how inflation behaves after the recession is over, but we need to be sure our policy remains consistent with a strategy that does not allow inflation to ratchet up over the business cycle."

ST LOUIS FED PRESIDENT JAMES BULLARD, NOV 20:

"At least over the near term, any additional influence through interest rate reductions will be limited, and the focus of monetary policy may turn to quantity measures.

"The fact is, monetary policy defined as movements in short-term nominal interest rates is coming to an end, at least for now."

* FED VICE CHAIRMAN DONALD KOHN, NOV 19:

"We have a very weak economy. The U.S. economy is declining right now. My most likely outcome is for a couple of quarters of negative growth and inflation coming down, but not getting to that deflationary state.

"Some people have argued that we should save our ammunition, that interest rate cuts aren't effective. I think that were we to see this (deflation) possibility, that we should be very aggressive with our monetary policy, as aggressive as we can be."

* FED RESERVE CHAIRMAN BEN BERNANKE, NOV 18:

"There are some signs that credit markets, while still quite strained, are improving.

"We have seen a vivid appreciation in the dollar recently during the crisis, precisely because there has been a lot of interest in the safe haven and liquidity in dollar markets."

(Reporting by Ros Krasny)