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August 29, 2019 Mr. Oliver Giesecke Columbia University 3022 Broadway New York, NY 10027 Dear Mr. Giesecke: This letter is in response to your Freedom of Information Act (“FOIA”) request dated and received by the Federal Open Market Committee (“FOMC” or “Committee”) FOIA Service Center on June 10, 2019. On August 1, 2019, you refined your request via email. Pursuant to the FOIA, 5 U.S.C. § 552, your request stated: According to the Romer and Romer (2004) AER article there exist two “internal memos from the Federal Reserve showing the ‘expected federal funds rate.’ One covers the period from January 1971 to December 1984 and the other covers the period from December 1983 to September 1992. These memos are based on the Weekly Report of the Manager of Open Market Operations. In addition to numerical values, the memos contain brief remarks about the timing of moves and where, within a given range, the open market desk was aiming. These remarks make it clear that the series reflects Federal Reserve intentions rather than passive expectations or forecasts.” Staff members searched and located one document that appears to contain the information you requested. An internal memo dated February 20, 2003, includes a collection of eight series showing the expected federal funds over (and beyond) the time span in which you are interested. While the years covered in this document do not match the specific date ranges in your request, it is likely that truncated versions of two of the included series are the documents referred to in your request. Given your interest in this topic, you may also find useful an FOMC document titled “A Modern History of FOMC Communication,” (June 24, 2003), available on the FOMC’s public website at this location: https://www.federalreserve.gov/monetarypolicy/files/FOMC20030624memo01.pdf Your request is hereby granted in full. 1 Please let me know if I can be of further assistance. 1 If you have any questions, you may contact the FOMC FOIA Public Liaison at (202) 973-7400. FOMC FOIA Tracking No. 2019-019 -2- Sincerely, [Signed] Peter Garavuso FOMC FOIA Service Center Attachment FOMC FOIA Tracking No. 2019-019 Authorized for public release by the FOMC Secretariat on 8/29/2019 Strictly Confidential (FR) Class I - FOMC BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM DIVISION OF MONETARY AFFAIRS Date: February 20, 2003 To: Normand Bernard, James Clouse, Athanasios Orphanides, Sherry Edwards, Gary Gillum, Matt Luecke and Jeff Slone From: David Lindsey Subject: Meeting next Tuesday at 10:00 am I have scheduled a meeting in my office on Tuesday, February 25 at 10:00 am to discuss the intended funds rate in the following attachments, which give: 1) A New York Desk series that Sherry oversaw. 2) Bonnie Garrett's series, as shown in a) a memo. b) a chart by Matt. 3) A series from Rudebusch (1995) from Thorton and Wheelock (appendix B table Bl). 4) Bonnie's series from Thornton. 5) The Open Market Operations series on the funds rate target from the Board's web site in a) a table. b) a chart. 6) A series by Wrightson. 7) A series from Jeff Slone via Jim Clouse used for event studies. 8) The series on the operating targets for the funds rate and borrowing chosen by the FOMC, as prepared after each FOMC meeting by the Secretariat. Authorized for public release by the FOMC Secretariat on 8/29/2019 HISTORICAL CHANGES OF THE FEDERAL FUNDS RATE & THE DISCOUNT RA TE (1971-PRESENT) i I DATE 11971 jJanuary 7 DISCOUNT RATE ICHANGE I 11-1/4 CHANGE NEW LEVEL Is NEW LEVEL/RANGE 114 January 8 -1/4 4 1/2 January 12 -1/4 4 1/4 1-1/4 -1/4 114 13 3/4 January 18-22 -1/4 5 late January early February February 12-19 -1/4 I early July July 15-16 mid August I I -1/4 February 19 jMarch to early July +1/4 I 5 I gradual increase 5 to 5 1/2 -0 to 1/4 5 to 5 1/4 to 1/4 5 to 5 1/2 gradual decrease 5 to 5 1/8 days prior to November 10 -0 to 1/8 5 November 12 -1/4 4 3/4 late November cut to midpoint of 41/4to47/8 -1/4 cut to slightly below midpoint of 4 1/4 to 4 7/8 December 16 decrease 4 1/8 December 17 -1/8 4 mid December to Febrnary 1972 gradual decrease 3 1/2 December 10-17 I to 5 3/4 +1/2 to 1/4 September to October November! 0-19 I FEDERAL FUNDS RATE II -1/4 4 1/2 i 1972 March to late December 1973 gradual increase 5 1/2 to 5 3/4 Authorized for public release by the FOMC Secretariat on 8/29/2019 lea1,y January jJ anuary 12-15 ] I !1+112 Is +1/4 to 0 - 5 3/4 +Oto 1/8 4 [O::, 1 7/8 January 19 + 1/4 to 1/8 late January gradual increase mid February +1/8 6 1/2 +l/8 to 1/4 6 5/8 to 6 3/4 +l/8 to 0 6 3/4 +Oto 1/4 6 3/4 to 7 February 23-26 !early March +1/2 5 1/2 I II mid March ll+l/4 5 3/4 May4 May 10-11 116 3/8 7 late March April 20 to May 4 6 +1/4 6 May 18 late May +1/4 7 1/4 +Oto 1/4 7 1/4 to 7 1/2 itoO 17 1/2 8 7 7/8 +3/8 8 1/4 June 8-11 +1/2 6 1/2 +1/4 June 29 to July 2 +1/2 7 +3/4 ' 1/2 } 1/4 +1/4 9 1/2 mid July gradual increase 10 to 10 1/4 late July +1/2 to 1/4 10 1/2 !July 6 August13-14 I +1/2 7 1/2 late August 1/2 11 September to February '74 radual decrease 9 1974 ,, March to mid April gradual increase days prior to April 24 +1/2 to 3/4 !April 24-25 j+l/2 10 I 1/2 to 10 3/4 8 April 25 +l/2 to 1/4 11 late May to mid July gradual increase 13 late July to late November gradual decrease 9 1/4 late November December 6-9 December 9 mid to late December late December 1975 -1/4 I 17 3/4 1~to0 -0 to 1/4 ~oO !I 9 8 3/4 to 9 ial decrease 11-1/4 I 18 Authorized for public release by the FOMC Secretariat on 8/29/2019 7 1/4 -1/2 January 3 - 10 -1/2 January 10 -1/4 17 1/2 7 1/4 mid January gradual decrease 6 3/4 to 7 days prior to February 4 -1/4 to 1/2 6 1/2 -1/4 6 1/4 February 6 !late February I -1/2 March 7-10 i II 4 -1/2 February 4-5 I 6 1/4 March 21 I I I -1/4 6 -1/4 5 3/4 -1/4 5 1/2 I i I I I late April I early May ~toO -1/4 May 15-16 5 to 5 1/4 I 6 I early June +1/4 to 0 5 1/4 mid June to mid September = gradual incr 6 1/4 to 6 1/2 !October to early January '76 11976 !January 12 January 16-19 gradual decrease I I I I /8 I I I I I I -1/2 -1/8 I 4 3/4 I 5 1/2 April 21 +1/8 May gradual increase 5 1/2 I July to early October gradual decrease Is Ii mid October -1/8 5 November 19-22 -1/4 5 1/4 118 1977 +1/8 1+1/2 1 6 s 3/4 8 6 1/8 September 20 +-1/8 6 1/4 mid October --1/4 6 1/2 mid September October 25-26 11978 !: ! mid August August 29-31 I l I 4 3/4 . . 5 7/8 gradual increase early December to early August '77 i ' -1/8 -1/8 November 26 I +1/4 D 6 I : Authorized for public release by the FOMC Secretariat on 8/29/2019 January 6-9 +1/2 6 1/2 January 9 April 19 ~ 6 3/4 17 7 1/8 +1/8 April 26 May 11 +1/2 ' I I 7 1/4 +1/8 April 27 I i i i 7 I May 17 +1/4 7 1/2 June 21 +1/4 7 3/4 July 19 +l/8 7 7/8 August 16 +1/8 8 +Oto 1/8 8 to 8 1/8 I ! June 30 to July 3 August 18-21 +1/4 +l/2 7 1/4 7 3/4 1/4 to 1/8 August 25 September 8 I +1/8 8 1/2 +1/8 8 5/8 +1/8 8 3/4 October 18 +1/4 9 days prior to November 1 + 1/2 to 3/4 9 1/2 to 9 3/4 jseptember 20 September 22 +1/4 8 September 29 October 13-16 November 1 +1/2 11+1 19 1/2 mid November jDecember 20 +3/8 to 1/8 I +1/8 1979 ~ 1+1/4 '.I 1110 1/4 +1/4 10 1/2 +1/8 10 5/8 +3/8 11 late August +1/4 11 1/4 August 31 +1/8 11 3/8 +1/8 11 1/2 late April July 20 +1/2 10 July 27 jAugust 15 August 16-17 September 18-19 I +1/2 +l/2 10 1/2 11 September 19 October 6-8 i+l jiate October 12 + 1 1/2 October 8 I '' 8 1/2 +2 1/2 I13 15 1/2 r I I: Authorized for public release by the FOMC Secretariat on 8/29/2019 I !November to December gradual decrease I j12 to 14 1980 I gradual increase= 14 early to late January l /2 to l 13 Febrnary 15 increa;-,, late February to late March 14 1/2 to 15 ' ! 1120 ' I April to mid May d e c r e ~ to l l l/2 -1 to 3/4 May22 i 12 -1 May 28-30 o 10 3/4 I -1 to 1 1/4 June 5 8 1/2 to 9 1/2 l June 12-13 -1 11 July 25-28 -1 10 I I !August 7 I mid September September 25-26 +1 1111 I I + l 1/2 to 1/2 10 +1 11 +3/4 to 1 Ii ~12 early October !114 to 0 mid October to early November gradual increase November 7 +l 1/2 to l 1/4 15 +2 to 3 17 to 18 +2 19 to 20 -2 17 to 18 i 12 November 21 !December 4-5 !+1 !December 5 I I 11981 13 1/1 to 13 3/4 I November 14-17 !December 29 11 I !early to mid January I I !late January to mid April I May 4-5 13 t:,,eu I May 8 I /mid June to mid October I /October 30 to November 2 1-1 !November 2 I 0 20 gradual decrease 16 raised to 18 to 20 14 +l !late May Luw,ud I gradual increase ]~ml decrease /20 I14 1/2 to 15 1/2 13 13 to 14 -1 1/2 jmid to late November l /December 3-4 11-1 I12 jDecember 4 I I grdual decrease -1 i 13 12 I I Authorized for public release by the FOMC Secretariat on 8/29/2019 11982 jearly January to mid April c:1 I mid April to mid July July 19-20 -1/2 ",[~ ' 11 -1/2 - August 13-16 -1/2 ~1/2 August 16 August 26-27 -1/2 I II -1/2 -1/2 9 November 22 December 13-15 -1 1 1/2 to 12 -1/2 11 1/2 I -1 10 to 10 1/2 -1/2 to 1 9 1/2 +1/2 10 ~ 9 1/2 -1/2 9 -1/2 8 1/2 9 1/2 October 12 November 19-22 12 1/2 to 13 10 August 27 October 8-12 gradual decrease : -1/2 August 2 jearly September 15 11 l/2 July 20 July 30 to August 2 gradual increase 8 1/2 ' 1983 ' /') ·~ () 5/8 late May to mid August late August to early October 11984 jearly to late March ual decrease I I gradual increase March 29 April 6-9 + 1/4 to 1/2 +1/2 9 1/4 to 9 1/2 9 late June 3/4 to 10 10 to 10 1/2 + 1/2 to 0 /2 late July to late August gradual increase early September to mid October gradual decrease 10 early November -1/2 9 1/2 November 22 -1/2 9 early December -1/4 Is 3/4 Is 114 November 21 December 21-24 -1/2 -1/2 ? to 11 3/4 8 1/2 s - l/2 I I Authorized for public release by the FOMC Secretariat on 8/29/2019 1985 mid February to mid March l\gradual in 9 late March to early April !gradual decrease 8 1/2 mid April -1/4 8 1/4 -1/2 May 17-20 i I ' 7 1/2 -1/2 May 20 oO mid July late July to late August f gradual increase September 6 +l/4to0 December 18 -1/4 0 1 '"' 7 3/4 3/4 to 8 1, ! , ' 7 3/4 I I 1986 i I May7 -1/2 jApril 18-21 J-112 !late May jmid June I I JJuly 10-11 1-1/2 JJuly 11 I 7 -1/2 7 1/4 6 1/2 -1/2 6 3/4 i I I +Oto 1/8 3/4 to 6 7/8 6 -1/2 6 3/8 to 6 3/8 0 -1/2 1 5 1/2 August 21 -3/8 to 1/2 Is 7/8 late December +1/8 6 1987 llgradual incre late April to mid May September 3 September 4 +Oto 1/4 +l/2 6 in the weeks after October 19 3/4 to 7 ,+ 1/2 to 1/4 7 1/4 + 1/2 to 3/8 6 3/4 to 6 7/8 1988 late January to early February I decrease · 6 1/2 late March to late June I increase 1/8 to 1/4 mid July August 5 August 9 mid November 1r I to 0 mid August August 20-21 I I 12 6 1/2 7 1/2 7 5/8 to 7 3/4 + 1/8 to 0 7 3/4 + 1/4 to 1/2 8 to 8 1/4 +3/8 to 1/8 8 3/8 I Authorized for public release by the FOMC Secretariat on 8/29/2019 ll=e=a=rly~D=ec=e=m=b=e1=·====ll=======l\,======{11=+=1/=4=to=3/=8==9 1Il=8=5=/8=t=o=8=3=/4===~'/i 1989 ll==========ii=====ll=====H=======l~========l/ early January to early , February !gradual increase 9 1/4 to 9 3/8 February 23 + 1/4 February 24 + 1/2 7 9 1/2 to 9 5/8 + 1/4 to 1/8 -1/4 to 1/8 )decrease 19 1/2 to 9 5/8 8 1/4 July 13 -1/4 8 October 29 -1/4 7 3/4 November 14 -1/4 7 1/2 December 7 -1/4 early June e:a.rl.y-J.uly....t9 mid December 1990 i December 18-19 -1/2 6 1/2 -1/4 !December 19 7 1991 6 3/4 January 8 -1/4 ll=============~l=======ll======il======== ========l February 1 -1/2 6 -1/2 I !March 8 -1/4 6 15 1/2 -1/4 5 3/4 April 30 -1/2 il=============~i======li====== ======91=========~ August 6 /4 5 1/2 ======ii===========lr September 13 -1/2 5 115 1/4 i 1 1 October 31 -1/4 5 ! 41/2 -1/4 43/4 ! November6 -1/2 lr=D=e=c=e=m=b=er=6======,r======tr======\:==l/=4=======ti=4=1=/2========! lr===========,i=====li======\i=======;:ji==========J: December 20 -1 13 1/2 1-1/2 4 li==19=92=====,r=======:r======1i=========,lf=====I! April 9 i-114 3 3/4 li=============,i=====li======ii=======;:j~=========l1 July 2 -1/2 3 -1/2 3 1/4 ii==============9i====={l======:1=========ell==========! September 4 -1/4 3 1993 No changes i' Authorized for public release by the FOMC Secretariat on 8/29/2019 --- 1994 February 4 l+l/4 3 1/4 March 22 +1/4 3 1/2 April 18 +1/4 3 3/4 May 17 +1/2 3 1/2 +1/2 4 1/4 August 16 +1/2 4 +1/2 4 3/4 1+3/4 4 3/4 +3/4 5 1/2 +1/2 5 1/4 +1/2 6 July 6 }14 5 3/4 December 19 -1/4 Is 112 I I II I !November 15 1995 February 1 11996 !January 31 I 1-1/4 5 -1/4 5 1/4 +1/4 5 1/2 1997 March 25 1998 September 29 October 15 -1/4 -1/4 4 3/4 -1/4 Is 114 Is UPDATED 10/14/98 The Federal Reserve did not target the federal funds rate as a means of implementing monetary policy during the period from October 1979 until the late 1980s. During that interim period, the federal funds rate was the result of market forces, in combination with other policy targets such as the degree of reserve pressure and targets for borrowed reserves. The FOMC for many years set a target range for the federal funds rate which it considered acceptable in the context of current policy. NOTE:A gradual increase (or decrease) indicates that the rate was increased (or decreased) in two or more steps. All data are based on available records, but this Bank does not guarantee their accuracy. I I Authorized for public release by the FOMC Secretariat on 8/29/2019 April 20, 2000 Memorandum To: Bill Gavin From: Bonnie Garrett Date: April 20, 2000 Re: Additional Comments on "A History of the Asymmetric Policy Directive" by Daniel Thornton and David Wheelock In revising their paper, Daniel Thornton and David Wheelock responded to questions regarding their federal funds target data by calculating test statistics for an additional data series and adding these results to several footnotes in their paper. To ascertain the changes in the "target" federal funds rate during most of the 1980' s, when that rate was not explicitly targeted by the FOMC, is not a simple task. We have researched that period by reviewing the Desk manager's reports to the FOMC, the transcripts, the directives, and the records of policy actions. 1 The results, as shown in the table below, are based on staff judgments regarding the consensus of the FOMC and should not be viewed as "official" in any sense. They should be cited as unofficial interpretations of FOMC policy changes. The table shows 84 policy changes over the 1983 through 1999 period. 2 Of course, the inclusion of federal funds rate changes that are not truly policy changes would bias the results. 1 This research has allowed a more reliable determination of the total number of funds rate changes, which had previously been referred to tentatively as "about 88." 2 For example, the change in the funds rate at the August 21, 1984 FOMC meeting was included in the new data used by the authors. However, Peter Sternlight stated in his report to the FOMC at that meeting, 'The upward creep in the Federal funds rate, from weekly averages around 11 to 11 1/.i percent through most of July to around 11 1/2 to 11 3/.l percent in recent weeks (and 11.78 percent so for this statement period) has been something of a puzzle, occurring against a background of average adjustment and seasonal borrowing at the discount window that remained fairly consistently around the $1 billion level." Authorized for public release by the FOMC Secretariat on 8/29/2019 April 20, 2000 There is also some concern about extending the analysis of asymmetry back to 1983. In i 983 and 1984, asymmetric language was included in some of the directives, but it was not used to guide intermeeting policy moves. There were only two intermeeting policy changes during those years, June 23, 1983 and November 2 i, 1984, the latter of which served to align FOMC policy with a cut in the discount rate. At the June 23, 1983 conference call, a consensus approved a modest increase in reserve restraint within the framework of the directive from the May 24, 1983 meeting. Authorized for public release by the FOMC Secretariat on 8/29/2019 April 20, 2000 FOMC Policy Changes "Expected" Funds Rate May 24, 1983 8.5 - 8.75 June 23, 1983 9 or slightly higher July 12-13.1983 9 or somewhat higher (9 - 9.5) October 4, 1983 9.25 - 9.5 March 26-27, 1984 10- 10.5 July 16-17, 1984 11.25 October 2, 1984 10.5 - 10.625 November 7, l 984 9.5 November 21, l 984 9 December 17-18, 1984 8.5 February 12-13, 1985 8.25 - 8.5 February 21, 1985 8.5 April 18, 1985 8.25 May 17, 1985 7.75 August l, 1985 7.75 or a shade higher September 6, 1985 8 December 16-17, 1985 7.75 March 7, l 986 7.25 or a shade higher April 18, l 986 6.75 or slightly higher Authorized for public release by the FOMC Secretariat on 8/29/2019 April 20, 2000 Date ~'..L&RfCted" Funds Rate June 5, 1986 6.875 July 10, 1986 6.375 August 14, l 986 6.25 - 6.375 August 20, 1986 5.875 January 15, 1987 6 April 30, 1987 61/z or somewhat higher May 19, 1987 6~ or somewhat lower September 3, 1987 6~ to 7 September 4, 1987 71/4 September 22, 1987 7 3/8 October 23, 1987 7 October 28, 1987 63/4 to 6 7/8 January 28, 1988 bl/2 to M~ February 9-10, 1988 61/2 March 29, 1988 M~ May 7, 1988 7 May 25, 1988 7114 June 22, 1988 71/2 August 9, 1988 8 to 8114 November 22, 1988 8 3/8 December 13-14, 1988 8 5/8 to 8 3/4 Authorized for public release by the FOMC Secretariat on 8/29/2019 April 20, 2000 Date "Expected" Funds Rate Early January 1989 8 7/8 to 9 February 14, 1989 9 to 9 1/8 February 24, 1989 93/.i to 9 7/8 June 6, 1989 9V2 to 9 5/8 July 5-6, 1989 91,4 July 27, 1989 9 October 19, 1989 8* November 6, 1989 81/2 December 18-19, 1989 814 Authorized for public release by the FOMC Secretariat on 8/29/2019 Intended Federal Funds Rate, 1983 - 1989 Percent 12 11 r······ 10 9 8 7 6 1983 1984 1985 1986 1987 1988 1989 FEDERAL RESERVE BANK of ST. LOUIS Daniel L. Thornton is a vice president and economist and David C. Wheelock is an assistant vice president and economist at the Federal Reserve Bank of St. Louis. Heidi L. Beyer provided research assistance. A History of the Asymmetric Policy Directive Daniel L. Thornton and David C. Wheelock he Federal Open Market Committee (FOMC) is the Federal Reserve System's principal monetary T policy-making committee. At the conclusion of 1 each FOMC meeting, the Committee issues operating instructions, known as the "directive," to the Open Market Trading Desk at the Federal Reserve Bank of New York. From 1983 through 1999, these instructions included a statement about the Committee's expectations for future changes in the stance of monetary policy, in addition to instructions for current policy. The statement pertaining to possible future policy was known as the "symmetry," "tilt," or "bias," of the policy directive. The directive was said to be symmetric if it indicated that a tightening or an easing of policy were equally likely in the future. Otherwise, the directive was said to be asymmetric toward either tightening or easing. Since February 1994, the FOMC has publicly announced changes in current monetary policy immediately upon making them. Before May 1999, public announcements made at the conclusion of FOMC meetings did not indicate whether the FOMC had issued an asymmetric directive. From May to December 1999, however, announcements following FOMC meetings included a statement of the Committee's expectation about the direction of future policy action, regardless of whether an action was taken at that meeting. This practice attracted considerable attention and much speculation about how to interpret statements about possible future policy changes. The Fed has never provided an official interpretation of these statements. To help clarify its intentions, the FOMC established a subcommittee to review both its policy directive and the public announcement following FOMC meetings. In January 2000, the FOMC announced that the public statement issued at the conclusion of future FOMC meetings will indicate any immediate change in the stance of policy, as well as the Committee's assessment of the balance of risks between heightened inflation pressure and economic weakness over the foreseeable future. The new language, however, is not intended to indicate the likely direction or the timing of future policy moves. The January 2000 announcement appears to bring to a close a distinct period in the history of Federal Reserve operating procedures. This article will review the history and implementation of asymmetry in FOMC policy directives between 1983 and 1999. Researchers and market participants have suggested at least three interpretations of the FOMC's use of asymmetric language. One is based on the belief that the FOMC chairman has discretion to adjust the stance of policy by small amounts between FOMC meetings without consulting the full Committee. An asymmetric directive, according to this interpretation, granted the chairman authority to make larger intermeeting policy changes in the direction specified by the asymmetric language than he otherwise was permitted to make. A second interpretation holds that the issuance of an asymmetric directive indicated that the FOMC was more likely to change the stance of policy either before or at the next FOMC meeting, than if a symmetric directive had been issued. Asymmetric language also is thought to have indicated the most likely direction of the policy action. Some observers interpret asymmetry as pertaining just to the intermeeting period, while others contend that asymmetry signaled likely changes in policy at the next FOMC meeting. Before 1994, the FOMC often changed its policy stance between meetings. Since 1994, however, it has rarely done so, suggesting a possible change in the horizon over which asymmetric language pertained. A third interpretation is that asymmetric directives primarily were used to build consensus among the voting FOMC members. For example, if several members of the Committee desired to tighten policy 1 The FOMC consists of the seven members of the Board of Governors of the Federal Reserve System and the presidents of the 12 Federal Reserve Banks. All Board members are voting members of the FOMC, and the Board chairman serves as FOMC chairman. The president of the Federal Reserve Bank of New York serves as FOMC vice chairman, and is a permanent voting member. The presidents of the remaining Reserve Banks have four votes, which rotate among them on a fixed schedule. Appendix A contains a listing of the members of the Board of Governors and Federal Reserve Bank presidents who served between 1983 and 1999. SEPTEMBER/OCTOBER 2000 1 REVIEW ----------· CHANGES IN THE EXPECTED FEDERAL FUNDS RATE, 1983-99 When the FOMC implemented policy by establishing targets for the level of borrowed reserves, FOMC members and staff estimated the level (or range) of the federal funds rate expected to ::ie consistent with the Committee's borrowed reserves target. Hence, changes in the expected funds rate during this period could reflect either policy changes or technical adjustments associated with achieving a given level of borrowed reserves. The FOMC did not, however, maintain a strict borrowed reserves target throughout the period studied here. At times, the Committee placed greater emphasis on the federal funds rate than on the level of borrowed reserves and, by the early 1990s, the FOMC probably had largely abandoned the targeting of borrowed reserves in favor of targeting the federal funds rate exclusively. In this paper, we employ two distinct sets of data on changes in the expected federal funds rate. Both sets are presented below (Tables B1 and B2). The information used to construct Th.bl es 1-3 in the text are derived from data in Rudebusch (1995) for 198493. These data have been used widely by researchers, and are based on Manager's Reports from the Open Market Trading Desk at the Federal Reserve Bank of New York. Spence Hilton of the Federal Reserve Bank of New York provided similar data to us for 1983. A second, unofficial series on the expected federal funds rate associated with FOMC policy changes during 1983-89 was provided to us by staff of the FOMC Secretariat's office. It also is presented below. Expected Federal Funds Rate and Dates of Changes in Expected Rate Date of Change Expected Funds Rate Date of Change Expected Funds Rate Expected Funds Rate Date of Change 03/07/1986 7.25 04/10/1986 7.125 07/20/1983 9.375 07/27/1983 9.4375 11/23/1984 9.5 9 08/17/1983 9.5625 12/06/1984 8.75 04/17/1986 7 08/24/1983 9.5 12/20/1984 8.5 04/24/1986 6.75 11/08/1984 10/05/1983 9.375 12/27/1984 8.125 05/22/1986 6.8125 03/01/1984 9.5 01/24/1985 8.25 06/05/1986 6.875 03/15/1984 9.875 02/14/1985 8.375 07/11/1986 6.375 03/22/1984 10 02/21/1985 8.5 08/14/1986 6.3125 03/29/1984 10.25 03/21/1985 8.625 08/21/1986 5.875 6 04/05/1984 10.5 03/28/1985 8.5 12/04/1986 06/14/1984 10.625 04/18/1985 8.375 04/30/1987 6.5 06/21/1984 11 04/25/1985 8.25 05/21/1987 6.75 07/19/1984 11.25 05/16/1985 8.125 07/02/1987 6.625 08/09/1984 11.5625 05/20/1985 7.75 08/27/1987 6.75 6.875 08/30/1984 11.4375 07/11/1985 7.6875 09/03/1987 09/20/1984 11.25 07/25/1985 7.75 09/04/1987 7.25 09/27/1984 11 08/22/1985 7.8125 09/24/1987 7.3125 10/04/1984 10.5625 08/29/1985 7.125 10.5 09/06/1985 10/28/1987 7 10/18/1984 10 12/18/1985 7.875 8 7.75 10/22/1987 10/11/1984 11/04/1987 6.8125 Table BI continued on next page 14 SEPTEMIU/OCTOBIR 2000 FEDERAL RESERVE BANK of ST, LOUIS Expected Date of Change Funds Rate Date of Change Expected Funds Rate Expected Date of Change Funds Rate 01/28/1988 6.625 12/20/1989 8.25 07/06/1995 5.75 02/11/1988 6.5 07/13/1990 8 12/19/1995 5.5 03/30/1988 6.75 10/29/1990 7.75 01/31/1996 5.25 05/09/1988 7 11/14/1990 7.5 03/25/1997 5.5 5.25 05/25/1988 7.25 12/07/1990 7.25 09/29/1998 06/22/1988 7.5 12/19/1990 7 10/15/1998 5 07/19/1988 7.6875 01/09/1991 6.75 11/17/1998 4.75 08/08/1988 7.75 02/01/1991 6.25 06/30/1999 5 08/09/1988 8.125 8.25 03/08/1991 6 5.75 08/24/1999 5.25 11/16/1999 5.5 10/20/1988 11/17/1988 8.3125 04/30/1991 08/06/1991 11/22/1988 8.375 09/13/1991 5.25 5.5 12/15/1988 8.6875 10/31/1991 12/29/1988 8.75 11/06/1991 5 4.75 01/05/1989 9 9.0625 12/06/1991 4.5 02/09/1989 12/20/1991 4 02/14/1989 9.3125 04/09/1992 3.75 02/23/1989 9.5625 07/02/1992 3.25 02/24/1989 9.75 09/04/1992 3 05/04/1989 9.8125 02/04/1994 3.25 06/06/1989 9.5625 03/22/1994 3.5 07/07/1989 9.3125 04/18/1994 3.75 07/27/1989 9.0625 05/17/1994 4.25 08/16/1994 4.75 08/10/1989 9 10/18/1989 8.75 11/15/1994 5.5 11/06/1989 8.5 02/01/1995 6 SOURCES: for 1983-Hilton; for 1984-93-Rudebusch (1995); for 1994-99-FOMC minutes. SEPTEMDER/OCTOHR 2000 15 REVIEW Unofficial Staff Interpretations of FOMC Policy Changes Date of Change 05/24/1983 06/23/1983 07/13/1983 10/04/1983 03/27/1984 07/17/1984 10/02/1984 11/07/1984 11/21/1984 12/18/1984 02/13/1985 02/21/1985 04/18/1985 05/17/1985 08/01/1985 09/06/1985 12/17/1985 03/07/1986 04/18/1986 06/05/1986 07/10/1986 08/14/1986 08/20/1986 01/15/1987 04/30/1987 05/19/1987 09/03/1987 09/04/1987 09/22/1987 10/23/1987 10/28/1987 01/28/1988 02/10/1988 03/29/1988 05/07/1988 05/25/1988 06/22/1988 08/09/1988 11/22/1988 12/14/1988 Expected Funds Rate or Range 8.5-8.75 9 or slightly higher 9 or somewhat higher 9.25-9.5 10-10.5 11.25 10.5-10.625 9.5 9 8.5 8.25-8.5 8.5 8.25 7.75 7.75 or a shade higher 8 7.75 7.25 or a shade higher 6.75 or slightly higher 6.875 6.375 6.25-6.375 5.875 6 6.5 or somewhat higher 6.75 or somewhat lower 6.75-7 7.25 7.375 7 6.75-6.875 6.5-6.75 6.5 6.75 7 7.25 7.5 8-8.25 8.375 8.5-8.75 Date of Change Expected Funds Rate or Range Early 01 /1989 02/14/1989 02/24/1989 06/06/1989 07/06/1989 07/27/1989 10/19/1989 11/06/1989 12/19/1989 8.875-9 9-9.125 9.75-9.875 9.5-9.625 9.25 9 8.75 8.5 8.25 NOTE: The values for the federal funds rates were developed by the FOMC Secretariat on the basis of its review of FOMC meeting transcripts and other records that are available to the public, currently through 1994. The funds rates shown in the table for the period prior to rnid-1989 in most cases do not reflect a decision by the FOMC to target the rates in question. They are based on staff judgments regarding the consensus of the POMC and should not be viewed as "official" in any sense. In this paper, we assume that a target change occurred on each recorded date, including those for which a specific rate or range was not given, e.g., July 13, l 983. 16 SIPTUll(R/OCTOBER 2000 http://www. federal reserve .gov/ fomc/fundsrate. ht FRB: Monetary Policy, Open Market Operations ~deral Reserve Board Open Market Operations Open market operations--purchases and sales of U.S. Treasury and federal agency securities--are the Federal Reserve' s principd tool for implementing monetary policy. The short-term objective for open market operations is specified by the Federal Open Market Committee (FOMC). This objective can be a desired quantity of reserves or a desired price (the federal funds rate). The federal funds rate ~s the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight. The Federal Reserve's objective for open market operations has varied over the years. During the 1980s, the focus gradually shifted toward attaining a specified level of the federal funds rate, a process that was largely complete by the end of the decade. Beginning in 1994, the FOMC began announcing changes in its policy stance, and in 1995 it began to explicitly state its target level for the federal funds rate. Under a policy announced on January 19, 2000, the FOMC issues, shortly after each of its meetings, a statement that includes its assessment of the risks in the foreseeable future to the attainment of its long-run goals of price stability and sustainable economic growth. For more information on open market operations, see the article in the Federal Reserve Bulletin (102 KB PDF). Intended federal funds rate Cha11g~2 1990 to present Challge (hasis 12oints) Date Level Increase Decrease· (percent): 2002 November 6 50 1.25 2001 December I of 3 11 25 1.75 November 6 50 2.00 October 2 50 2.50 September 17 50 3.00 August 21 25 3.50 June 27 25 3.75 2/19/03 3:02 P,\ FRB: Monetary Policy, Open Market Operations http://www.federalreserve.gov/fomc/fundsrate. May 15 50 4.00 April 18 50 4.50 March 20 50 5.00 January 31 50 5.50 January3 50 6.00 2000 Mayl6 50 6.50 March21 25 ci.00 February 2 25 5.75 November 16 25 5.50 August24 25 5.25 Jtlne30 25 5;00 1999 1998 November 17 25 4.75 October· 15 25 5:00 25 5.25 September 29 ... 1997 March25 25 5.50 1996 January 31 25 5.25 12 25 5.50 July 6 25 5.75 1995 December February 50 6.00 November 15 75 5.50 August l6 50 4.75 May 17 50 4.25 April 18 25 3.75 March 22 25 3.50 25 3.25 1 1994 February 4.. 2 of 3 2/19/03 3:02 P1\ FRB: M01ietary Policy, Open Market Operations 1992 September 4 http://www.federalreserve.gov/fomc/fundsrate.; 25 3.00 July 2 50 3.25 April 9 25 3.75 50 4.00 6 25 4.50 November 6 25 4.75 October 31 25. 5.00 September 13 25 5.25 August 6 25 5.50 April 30 25 5;75 March8 25 6.00 February 1 50 January 9 25 6.25 · · 6.75 December 18 25 7.00 December 7 25 7.25 November 13 25 7.50 October 29 25 7.75 July 13 25 8.00 1991 December 20 December 1990 A basis point is 1/100 percentage point. Horne I Monetary policy Accessibility I Contact Us r:asTupdafo: JaiiuarY29, 2003 3 of 3 2/19/0, J:02 Pi\ Authorized for public release by the FOMC Secretariat on 8/29/2019 Intended Federal Funds Rate Percent 10 8 6 4 2 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0 Authorized for public release by the FOMC Secretariat on 8/29/2019 I Chronology of Federal Reserve Policy Changes Since 1987 Date of Tightening: Duration (in months) Number of moves: Cumul. change in fed funds: Easing: Duration (in months) Number of moves: Cumul. change in fed funds: Tightening: Duration (in months) Number of moves: Cumul. change in fed funds: Movement 2-Jan 9 1987 30-Apr 7 20-May 144 2-Jul 3-Sep 4-Sep 8-0ct 19-0ct 4 4 4-Nov 28-Jan -81 1988 I I-Feb 14 15 331 JO-Mar 9-May 25-May 22-Jun 19-Jul 8-Aug 9-Aug 10-Nov 22-Nov 1989 Easing: Duration (in months) Number of moves Cumul. change in fed funds: 40 24 -681 1990 1991 1992 1993 1994 Tightening: Duration (in months) Number of moves: Cumul. change in fed funds: 12 7 300 Easing: Duration (in months) Number of moves: Cumul. change in fed funds: Duration (in months) Number of moves: Cumul. change in fed funds: Duration (in months Number of moves: Cumul. change in fed funds: Duration (in months) Number of moves: Cumul. change in fed funds: 7 3 -75 1996 NIA 1997 I 25 2 1998 3 -75 8 1999 1995 Tightening: Easing: Tightening: 4 100 2000 JS-Dec 5-Jan 9-Feb 23-Feb 24-Feb 17-Mav 6-Jun 7-Jul 27-Jul 22-Aug 6-Nov 20-Dec 13-Jul 29-0ct 16-Nov 7-Dec ,, 18-Dec 8-Jan 1:Feb 8-Mar JO-Apr 6-Aug 13-Sep J_Q_'.Oct 6-Nov 6-Dec 20-Dec 9-Apr 2-Jul 4-Sep (None) 4-Feb 22-Mar 18-Apr 17-May 16-Aug 15-Nov I-Feb 6-Jul 19-Dec 31-Jan 25-Mar 29-Sep 15-0ct 17-Nov JO-Jun 24-Aug 16-Nov 2-Feb 21-Mar # of Days Since Movement Previous Move 134 118 138 43 63 I 34 II 16 85 14 48 In Fed Funds 13 50 25 -13 25 50 -6 -25 -25 -19 -13 25 25 25 25 19 6 38 13 JJ 31 3I 31 25 19 6 New Rate Levels -25 -25 -25 Fed Funds 6 6 l/2 6 3/4 6 5/8 6 7/8 7 3/8 7 5/16 7 1/16 6 13/16 6 5/8 6 1/2 6 3/4 7 7 1/4 7 1/2 7 11/16 7 3/4 8 1/8 8 1/4 8 3/8 8 11/16 9 9 5/16 9 9/16 9 314 9 13/16 9 9/16 9 5/16 9 1/16 9 8 1/2 8 1/4 8 7 3/4 7 1/2 7 1/4 7 6 3/4 6 1/4 6 5 3/4 5 1/2 5 1/4 -25 5 -25 -25 -50 -25 -50 -25 4 3/4 4 1/2 4 3 3/4 3 1/4 3 518 46 27 29 91 91 78 155 166 43 419 25 25 25 50 50 75 50 -25 -25 -25 25 3 1/4 3 1/2 3 3/4 4 l/4 4 3/4 5 1/2 6 5 3/4 5 l/2 553 -25 -25 -25 25 25 25 25 5 Y, 5 4 '!. 5 25 6 40 16 28 27 20 l 93 12 23 21 35 14 I 82 20 31 20 26 76 44 205 108 18 21 II 21 24 35 53 98 38 47 7 30 14 Ill 84 64 16 33 225 55 84 78 48 -25 -25 -25 -6 -50 -25 -25 -25 -25 -25 -25 -25 -50 -25 5 l/4 5 1/2 5 '!, 5 Y, 5 '!. Discount n/c n/c n/c n/c n/c 6 n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c 6 l/2 n/c n/c n/c n/c n/c n/c 7 n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c 6 1/2 n/c 6 n/c 5 1/2 n/c 5 n/c 4 1/2 n/c 3 1/2 n/c 3 n/c n/c n/c n/c n/c 3 1/2 4 4 314 5 1/4 n/c n/c 5 nlc 5 4 '/, 4 y, n/c 4 '!. 5 5 y. 5 y, Note: The actual dat.::s of some po!11y changes pnor to 1994 are uncertain, The Fed did not formally announce policy changes at the tsme, and vanous sources do not always agree. Funds target levels prior to 1994 are also open to debate in same cases. Where Fed sources show A range rather than a single rate for the target, we have treated the midpoint of the range as the targel. Source: R.H. Wnghtson Associates, Inc. I Authorized for public release by the FOMC Secretariat on 8/29/2019 Date Target Federal Funds Rate 03/05/84 03/15/84 03/22/84 03/29/84 04/05/84 06/14/84 06/21/84 07/19/84 08/09/84 08/30/84 09/20/84 09/27/84 10/04/84 10/11/84 10/18/84 11/08/84 11/23/84 12/06/84 12/20/84 01/24/85 02/14/85 02/21/85 03/21/85 03/28/85 04/18/85 04/25/85 05/16/85 05/20/85 07/11/85 07/25/85 08/22/85 08/29/85 09/06/85 12/18/85 03/07/86 04/10/86 04/17/86 04/24/86 05/22/86 06/05/86 07/11/86 08/14/86 08/21/86 12/04/86 04/30/87 05/21/87 07/02/87 08/27/87 09/03/87 09/04/87 09/24/87 9.50 9.88 10.00 10.25 10.50 10.63 11.00 11.25 11.56 11.44 11.25 11.00 10.56 10.50 10.00 9.50 9.00 8.75 8.50 8.25 8.38 8.50 8.63 8.50 8.38 8.25 8.13 7.75 7.69 7.75 7.81 7.88 8.00 7.75 7.25 7.13 7.00 6.75 6.81 6.88 6.38 6.31 5.88 6.00 6.50 6.75 6.63 6.75 6.88 7.25 7.31 Authorized for public release by the FOMC Secretariat on 8/29/2019 10/22/87 10/28/87 11/04/87 01/28/88 02/11/88 03/30/88 05/09/88 05/25/88 06/22/88 07/19/88 08/08/88 08/09/88 10/20/88 11/17/88 11/22/88 12/15/88 12/29/88 01/05/89 02/09/89 02/14/89 02/23/89 02/24/89 05/04/89 06/06/89 07/07/89 07/27/89 08/10/89 10/18/89 11/06/89 12/20/89 07/13/90 10/29/90 11/14/90 12/07/90 12/19/90 01/09/91 02/01/91 03/08/91 04/30/91 08/06/91 09/13/91 10/31/91 11/06/91 12/06/91 12/20/91 04/09/92 07/02/92 09/04/92 02/04/94 03/22/94 04/18/94 05/17/94 7.13 7.00 6.81 6.63 6.50 6.75 7.00 7.25 7.50 7.69 7.75 8.13 8.25 8.31 8.38 8.69 8.75 9.00 9.06 9.31 9.56 9.75 9.81 9.56 9.31 9.06 9.00 8.75 8.50 8.25 8.00 7.75 7.50 7.25 7.00 6.75 6.25 6.00 5.75 5.50 5.25 5.00 4.75 4.50 4.00 3.75 3.25 3.00 3.25 3.50 3.75 4.25 Authorized for public release by the FOMC Secretariat on 8/29/2019 08/16/94 11/15/94 02/01/95 07/06/95 12/19/95 01/31/96 03/25/97 09/29/98 10/15/98 11/17/98 06/30/99 08/24/99 11/16/99 02/02/00 03/21/00 05/16/00 01/03/01 01/31/01 03/20/01 04/18/01 05/15/01 06/27/01 08/21/01 09/17/01 10/02/01 11/06/01 12/11/01 11/06/02 4.75 5.50 6.00 5.75 5.50 5.25 5.50 5.25 5.00 4.75 5.00 5.25 5.50 5.75 6.00 6.50 6.00 5.50 5.00 4.50 4.00 3.75 3.50 3.00 2.50 2.00 1.75 1.25 Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1979 Meeting Dates Borrowing Symmetry Directive Federal Funds Assumption Expected Rate 10 or slightly higher February 6 maintain funds rate March 20 raise/lower objective if aggregates high/low 10 or slightly higher April 17 raise/lower funds rate if aggregates high/low 10 or slightly higher May 22 raise/lower funds rate if aggregates high/low 10.25 July 11 raise/lower funds rate if aggregates high/low 10.25 DR raised to 10% on 7/20 10.5 (7/27) August 14 raise/lower funds 11 funds rate if agg. high/low DR raised to 10.5% on 8/17 11.25 (8/30) September 18 raise/lower funds rate if agg. high/low DR raised to 11% on 9/19 11. 5 October 6 restrain expansion in reserves 11.5 - 15.5 November 20 restrain 1,500 DR raised to 12% on 10/8 1,700 13 - 14 Authorized for public release by the FOMC Secretariat on 8/29/2019 1980 Meeting Dates Directive Svmmetrv Borrowing Assumption Federal Funds January 8-9 expansion February 4-5 expansion March 18 expansion April 22 expansion 1,375 13 - 19 10.5 - 19 (5/6) on 5/7, surcharge on DR removed May 20 expansion 100 DR cut to 12% on 5/30 DR cut to 11% on 6/13 8.5 - 14 July 9 expansion 75 DR cut to 10% on 7/28 8.5 - 14 August 12 expansion September 16 expansion 1,000 Expected Rate 11.5 - 15.5 1,250 11.5 - 15.5 DR raised to 13% on 2/15 11.5-16.5 (2/22) 11.5-17.5 (3/6) 11.5-18 (3/7) on 3/17, 3% surcharge on DR 2,750 13 - 20 75 8.5 - 14 750 8 - 14 11-11.25 DR raised to 11% on 9/26 October 21 maintain on 11/17, November 18 maintain 1,500 December 18-19 maintain 1,500 1,300 9 - 15 DR raised to 12% plus 2% surcharge 13 - 17 l 13 - 18 (11/26) DR raised to 13% plus 3% surcharge on 12/5 15 - 20 1. The Committee also removed the provision subjecting reserves to an intermeeting range for the federal funds rate. ...) - Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1981 Meeting Dates Directive Svmmetry Borrowing Assumption Federal Funds Expected Rate February 2-3 maintain 15 - 20 March 31 maintain on 5/5, May 18 1,300 1,150 13 - 18 DR raised to 14% plus 4% surcharge reserves to decelerate M-lB growth 2,100 18 - 20 1,500 15 - 21 July 6-7 maintain August 18 maintain October 5-6 maintain 850 DR surcharge cut to 2% on 10/13 DR cut to 13% on 11/2 DR surcharge removed on 11/17 13-14 13. 5 November 17 maintain DR cut to 12% on 12/4 400 11 - 15 12-13 December 21-22 maintain 300 12-12.5 1,400 15 - 21 DR surcharge cut to 3% on 9/22 12 - 17 -4- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1982 Meeting Dates Directive Svmmetry Borrowing Assumption Federal Funds February 1-2 some decline in M-1 1,500 14 - 15 March 29-30 accept some shortfall in M-1 1,150 14 - 15 May 18 maintain 800 14 June 30-July 1 more rapid 800 growth acceptable DR cut to 11.5% on 7/19 DR cut to 11% on 7/30 DR cut to 10.5% on 8/13 13 - 15 August 24 more rapid growth acceptable DR cut to 10% on 8/26 10.5 October 5 maintain 300 DR cut to 9.5% on 10/8 November 16 December 20-21 350 2 maintain twd firmer 250 DR cut to 9% on 11/19 DR cut to 8.5% on 12/14 maintain expansion 200 Expected Rate 11. 5 11 10.5 10 9.5 9.5 9 8.5 8.5 2. Somewhat slower growth ... would be acceptable and desirable somewhat more rapid growth in the broader aggregates would be tolerated. Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1983 t'.1~'-eting Dates Directive Symmetry Borrowing Assumption Federal Funds February 8-9 maintain twd ease 3 March 2 8-29 maintain twd ease 250 Ma:{ 24 increase twd ease reserve restraint only slightly 350 Expected Rate 8.5 200 8.5 8.5 - 8.75 400-500 (6/23) 9 or slightly higher 9 to 9.5 July 12-13 increase slightly reserve restraint no tilt 600-800 August 23 maintain no tilt 700-900 October 4 maintain sl. less restraint November 14-15 maintain twd firmer December 19-20 maintain twd firmer 9.5 650 9.25 - 9.5 650 9.25 - 9.5 650 9.25 - 9.5 3. Lesser restraint would be acceptable. [Characterizations of the degree of restraint that would/might be acceptable were initiated in 1983 FOMC meetings.] -o- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1984 Meeting Dates Directive Synunetry Borrowing Assumption Federal Funds Expected Rate January 30-31 maintain 9.25 - 9.5 March 26-27 maintain twd firmer 1,000 on 4/6 announced DR incr. to 9% 10 - 10.5 10.5 May 21-22 maintain no tilt 1,000 10.5 July 16-17 maintain twd firmer 1,000 11.25 August 21 maintain no tilt 1,000 11. 5 750 10.5 - 10.625 twd ease 650 October 2 maintain twd ease lesser degree of restraint sought in recent weeks November 7 reduce twd ease 575 9.5 somewhat on 11/21 announced DR cut to 8.5% 9 December 17-18 reduce twd ease 300 on 12/21 announced DR cut to 8% 8.5 8 - 8.25 Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Ass.vn:1..iti.ons 1985 Meeting Dates Directive Symmetry Borr12w~ng Asumriticm Expected Rate Federal Funds February 12-13 maintain reserve conditions of recent weeks twd firmer 350 8.25 - 8.5 8.5 (2/21) 8.5 - 8.75 (3/20) March 26 maintain no tilt 8.5 8.25 (4/18) 400 450 (4/25) DR cut to 7.5% announced on 5/17 May 21 maintain about the same degree twd ease 7.75 7.75 350 (on 6/20) 7.75 or a shade lower 350 400 (on 8/1) shade higher 7.625 - 7.75 7.75 or a July 9-10 maintain August 20 maintain no tilt pressure of recent weeks 425 October 1 maintain no tilt pressure of recent weeks 500 8 November 4-5 generally to maintain twd ease 450 8 or a shade lower December 16-17 decrease somewhat twd ease 350 7.75 twd firmer 7.75 - 7.875 500 ( on 9 / 6) 8 -8- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1986 Meeting Dates Directive Symmetry Borrowing Assumption Expected Rate Federal Funds February 11-12 maintain no tilt 300 7.75 or a shade higher 7.25 or a shade higher DR cut to 7% announced on 3/7 April 1 maintain 300 no tilt (on 4/10) DR cut to 6.5% announced on 4/18 May 20 maintain no tilt 4 300 (on 6/5) July 8-9 7.25 or a shade higher 7.25 6.75 or slightly higher 6.75 - 6-7/8 6. 875 decrease twd ease 300 5 somewhat DR cut to 6% announced on 7/10 (on 8/14) 6.875 6.375 6.25-6.375 6.25 - 6.375 decrease no tilt 300 6 slightly DR cut to 5.5% announced on 8/20 5.875 September 23 maintain twd firmer 300 5.875 November 5 maintain no tilt 300 August 19 (on 11/20) December 15-16 maintain twd ease 300 (on 1/15/87) 5.875 5.875 or a shade higher 5.875 or a shade higher 6 4. Restraint acceptable if monetary growth does not slow and economic growth picks up. Less restraint acceptable if markedly slow money growth and slow economic growth. 5. Taking account of the possibility of a change in the discount rate. 6. Taking account of the possibility of a change in the discount rate. -9- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions Meeting Dates Directive S)l:mmetr)I: Borrowing Assumption February 10-11 Maintain twd firmer 300 March 31 Maintain one-way twd firmer 300 6 400 on 4/30 May 19 increase July 7 7 Expected Rate Federal Funds 8 6 or slightly higher 6-1/2 or somewhat higher 6-3/4 or somewhat lower twd firmer 500 maintain no tilt 500 August 18 maintain twd firmer September 22 maintain pressure sought in recent weeks no tilt 600 500 on Oct. 23 450 on Oct. 28 7-3/8 7 6-3/4 to 6-7/8 November 3 maintain pressure sought in recent days twd ease 400 300 on Dec. 4 6-3/4 to 6-7/8 December 15-16 maintain no tilt 300 250 on Jan. 28 6-3/4 to 6-7/8 6-1/2 to 6-3/4 500 600 on Sept. 3 increase in DR to 6 % on 9/4 6-1/2 to 6-3/4 6-1/2 to 6-3/4 6-3/4 to 7 7-1/4 7. Increased somewhat from the degree of pressure sought in recent weeks. 8. "Taking account of the possibility of a change in the discount rate." $500 M with no change in discount rate. -10- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions Expected Rate Federal Funds Meeting Dates Directive Symmetry Borrowing Assumption February 9-10 maintain slightly reduced pressure sought in recent days no tilt 200 6-1/2 March 29 increase slightly no tilt 300 400 on May 7 6-3/4 7 May 17 maintain initially twd firmer 400 500 on May 25 550 on June 22 7 increase slightly twd firmer 600 7-1/2* June 29-30 increase in DR to 6-1/2 on 8/9 7-1/4 7-1/2 8 to 8-1/4 August 16 maintain twd firmer 600 8 to 8-1/4 September 20 maintain twd firmer 600 8 to 8-1/4 November 1 maintain twd firmer 600 400 on Nov. 22 8 to 8-1/4 8-3/8 December 13-14 increase somewhat twd firmer 500 initially 600 early Jan. 8-5/8 - - 3/4 8-7/8 to 9 * A rate of 7-1/2 or slightly higher was expected initially but the actual level came in higher (because an increase in the discount rate was anticipated in the market) and the Desk's expectation was raised to 7-5/8 to 7-3/4 by midJuly (without any change in the borrowing assumption). -11- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions Meeting Dates Directive Symmetry . February 7-8 maintain twd firmer March 28 maintain May 16 maintain Borrowing Assumption Expected Rate Federal Funds 600 on Feb. 14 700 increase in DR to 7% on Feb. 24 500* on March 9 8-7/8 to 9 9 to 9-1/8 9-3/4 to 7/8 9-3/4 to 7/8 twd firmer 500 9-3/4 to 7/8 no tilt 600* 500 on June 6 9-3/4 to 7/8 9-1/2 to 5/8 decrease no tilt slightly 600** 550 on July 27 9-1/4 9 to 9-1/8 August 22 maintain twd ease 550 October 3 maintain twd ease 500* 400** 350* 300 250* on on on on 200* 150"' on Dec 11 July 5-6 November 14 December 18-19 maintain decrease slightly twd ease no tilt 9 to 9-1/8 Oct Nov Nov Nov 19 2 6 8 9 8-3/4 8-1/2 8-1/2 125 * Borrowing assumption changed for technical reasons ** Change in borrowing assumption reflected a technical adjustment and a change in reserve pressure. 8-1/4 -12- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions Meeting Dates Directive Symmetry Borrowing Assumption February 6-7 maintain no tilt 150* March 27 maintain no tilt 150 200* 300* on April 26 on May 3 350* 400* 450* on June 14 on June 28 May 15 July 2-3 maintain maintain no tilt twd ease Expected Rate Federal Funds 8-1/4 8-1/4 8-1/4 8-1/4 450 400 on July 13 450* on July 26 500* on August 2 8 August 21 maintain twd ease 500 8 October 2 maintain twd ease 450* 400* on October 18 350** on October 29 300* on November 8 8 November 13 decrease slightly twd ease 225** 200* 150* 125 100 December 18 decrease slightly twd ease 7-3/4 125** 7-1/2 on on on on November December December December 23 6 7 13 on December 19 reduction in DR to 6-1/2 on Dec. 19 * Borrowing assumption changed for technical reasons ** Change in borrowing assumption reflected a technical adjustment and a change in reserve pressure. 7-1/4 7 -13- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1991 Meeting Dates Directive Symmetry Borrowing Assumption 100 on Jan. 9 reduction·in DR to 6 % on Feb. 1 (100 bor. retained) February 5-6 maintain March 26 maintain May 14. July 2-3 August 20 October 1 November 5 maintain maintain maintain maintain decrease somewhat twd ease 100 75 on March 8 125* on March 21 125 150* reduction in DR to 5-1/2% 175** 200* maintain 6-3/4. 6-1/4. 6-1/4. 6 6 no tilt no tilt no tilt on on on on April 18 April 30 April 30 May 2 225* 250* 275* 325* on June on June on June 13 20 27 325 350* 4.00* 375 on July on July on Aug. 11 5-3/4. 25 6 on on on on Sept. 5 Sept. 12 Sept. 13 Sept. 13 325 300* 275* 250* 175** on on on on Oct. Oct. Oct. Oct. twd ease twd ease 5-1/2 5-1/2 375 350* 300* reduction in DR to 5% 325** twd ease twd ease 5-3/4. 5-3/4. 5-1/4. 5-1/4. 175*** reduction in DR to 4.-1/2% 150* 125* 100* 75 December 17 Expected Rate Federal Funds on Nov. on on on on on Nov. Nov. Nov. Nov. Dec. 3 10 17 31 5 6 4.-3/4. 6 7 14. 29 6 4.-1/2 75 reduction in DR to 3-1/2% on Dec. 20 on Dec. 20 100 75* on Jan. 16 4.-1/2 4. -14- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions Meeting Dates Directive Symmetry Borrowing Assumption 75* on Jan. 16 February 4-5 maintain twd ease 100* March 31 maintain twd ease 100 75 100* on April 9 on April 30 100 125* 150* 225 on May 21 on May 28 on June 25 May 19 June 30-July 1 August 18 October 6 November 17 December 22 maintain maintain maintain maintain maintain maintain no tilt 225 twd ease reduction in DR to 3% 225 250 twd ease twd ease twd ease no tilt 4 3-3/4 on July 2 on July 2 on July 30 on Sept. 2 on Sept. 4 175* 150* 125* 100* 75* on on on on 50 4 3-3/4 3-3/4 250 225* 200 75 50* Expected Rate Federal Funds 3-1/4 3-1/4 3 3 October 15 October 22 October 29 November 5 3 on December 10 3 * Borrowing assumption changed for technical reasons. ** Borrowing assumption changed to reflect an easing in reserve pressures associated with a partial pass-through of the effects of the reduction in the discount rate. ***Offsetting adjustments were made that left the borrowing assumption unchanged at $175 million; the assumption was raised by $25 million following a modest easing of 1/4 percentage point in the federal funds rate expectation at the FOMC meeting on November 5 and a 1/2 percentage point reduction in the discount rate announced before the opening of business on November 6 but was lowered by $25 million for technical reasons. -15- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1993 Symmetry Borrowing Assumption Meeting Dates Directive February 2-3 maintain no tilt 50 March 23 maintain no tilt 50 75* 100* Expected Fed Funds Rate 3 3 on April 22 on May 13 May 18 maintain twd. firming 100 125* on May 20 150* on June 10 200* on June 24 3 July 6-7 maintain twd. firming 225* 250* on July 22 3 August 17 maintain no tilt 250 3 September 21 maintain no tilt 250 225* 200* 150* 100* November 16 December 21 * maintain maintain no tilt no tilt 100 150* 100* 75* 50* 50 Borrowing assumption changed for technical reasons. 3 on Oct. on on Nov. on Nov. 14 4 11 3 on on on on Dec. 9 3 -16- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1994 Meeting Dates February 3-4 March 22 May 17 Directive Symmetry increase slightly no tilt increase slightly no tilt increase no tilt somewhat DR increased to 3-1/2 Borrowing Assumption Expected Fed Funds Rate 3-1/4 75 100 125 on 4/18 150 on 5/5* 175 on 5/12* 3-1/2 3-3/4 200 4-1/4 225 on 5/26 325 on 6/23 July 5-6 August 16 maintain twd firmer increase no tilt somewhat DR increased to 4 325 375 425 450 November 15 maintain twd firmer increase no tilt significantly DR increased to 4-3/4 475 450 425 375 325 275 225 4-1/4 4-3/4 475 500 475 September 27 on 7/7 on 7/21 on 7/28 on 8/25 on 9/1 4-3/4 on on on on on on 10/6 10/13 10/20 10/27 11/3 11/10 225 5-1/2 175 on 11/24 125 on 12/8 December 20 maintain twd firmer 125 5-1/2 -17- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1995 Meeting Dates Jan 31-Feb 1 Directive increase somewhat Symmetry Borrowing Assumption no tilt Expected Fed Funds Rate 75 6 75 100 on 4/13 150 on 4/27 175 on 5/11 6 DR increased to 5-1/ 4 March 28 maintain twd firmer May 23 maintain no tilt 175 225 on 6/22 6 July 5-6 decrease slightly twd ease 250 275 on 7/20 5-3/4 August 22 maintain no tilt 275 5-3/4 September 26 maintain no tilt 275 250 on 10/12 200 on 10/26 100 on 11/9 5-3/4 November 15 maintain no tilt 100 75 on 11/23 5-3/4 December 19 decrease slightly no tilt 75 50 on 1/11/96 5-1/2 -18- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1996 Meeting Dates January 30-31 Directive decrease slightly Symmetry no tilt Borrowing Assumption Expected Fed Funds Rate 50 5-1/4 50 5-1/4 DR reduced to 5% March 26 maintain no tilt 75 on 4/25 100 on 5/9 May 21 maintain no tilt 150 175 on 6/2 225 on 6/20 5-1/4 July 2-3 maintain twd firmer 300 325 on 8/1 5-1/4 August 20 maintain twd firmer 325 5-1/4 September 24 maintain twd firmer 300 250 on 10/10 200 on 10/24 100 on 11/7 5-1/4 November 13 maintain twd firmer 5-1/4 75 on 11/21 December 17 maintain twd firmer 75 5-1/4 -19- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1997 Expected Fed Funds Rate Meeting Dates Directive Symmetry February 4-5 maintain twd firmer 75 5-1/4 March 25 increase slightly no tilt 75 5-1/2 Borrowing Assumption 125 on 4/24 175 on 5/8 May 20 maintain twd firmer 225 250 on 5/22 275 on 6/19 325 on 6/26 5-1/2 July 1-2 maintain twd firmer 350 on 7/3 400 on 7/31 5-1/2 August 19 maintain twd firmer 400 375 on 9/25 5-1/2 September 30 maintain twd firmer 375 275 on 10/9 225 on 10/23 150 on 11/6 5-1/2 November 12 maintain twd firmer 150 125 on 11/20 100 on 12/4 5-1/2 December 16 maintain no tilt 100 50 on 1/15/98 5-1/2 -20- Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1998 Meeting Dates Directive Symmetry Feb 3-4 maintain no tilt March 31 maintain twd firmer Borrowing Assumption Expected Fed Funds Rate 50 5-1/2 75 5-1/2 lQO on April 9 May 19 maintain twd firmer 125 150 on June 4 175 on June 18 5-1/2 June 30-July 1 maintain twd firmer 175 225 on July 2 5-1/2 August 18 maintain no tilt 5-1/2 250 on July 29 275 on Aug. 13 200 on Sept. 24 decrease October 15 decrease [Intermeeting action, no vote] [Discount rate reduced to 4-3/4 on 10/15) 100 on Oct. 22 75 on Nov. 5 November 17 twd ease 175 125 on Oct. 8 September 29 75 decrease no tilt [Discount rate reduced to 4-1/2 on 11/17] 5-1/4 5 4-3/4 50 on Dec. 17 December 22 maintai'n no tilt 50 4-3/4 - 21 - Authorized for public release by the FOMC Secretariat on 8/29/2019 Directives and Borrowing Assumptions 1999 February 2-3 maintain no tilt March 30 maintain no tilt so so 4-3/4 4-3/4 75 on April 22 100 on May 6 May 18 maintain twd firmer 4-3/4
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