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EXECUI i v j& EXECUTIVE OFFICE OF TH E PRESIDENT BU REAU O F TH E B U D G ET W A SH I OFFIC E O F TH E D IRE CTO R October 4, 1965 MEMORANDUM FOR THE PRESIDENT Subject: Monetary policy and the budget When Federal Reserve staff members prepare their economic forecasts for the Board of Governors, one of the important elements is the budgetary outlook. Normally, and on a confidential basis, we try to keep them abreast of our thinking, in a general way. sver, I have instructed my staff not to discuss the retary outlook with the Fed. Quite apart from security liderations, I am afraid that the budgetary outlook ■ be used as an excuse to tighten u p on monetary pold I have discussed this with CEA members, and will talk to Secretary Fowler about it before our Quadriad meeting. I believe it is very important that we avoid a discussion of budgetary totals at the Quadriad meeting. Charles L. Schultze Director