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of Federal Open Market Committee
Meeting
Committee
Market
Open
Federal
of
Meeting
February 6, 1968
MINUTES OF ACTIONS

A meeting of the Federal Open Market Committee was held in
the offices of the Board of Governors of the Federal Reserve System
in Washington, D.

PRESENT:

C.,

on Tuesday, February 6, 1968, at 9:30 a.m.

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Martin, Chairman
Hayes, Vice Chairman
Brimmer
Daane
Francis
Maisel
Mitchell
Robertson
Scanlon
Sherrill
Swan
Wayne

Messrs.

Ellis, Hickman, and Galusha,

Alternate

Members of the Federal Open Market Committee
Messrs. Bopp, Kimbrel, Clay, and Coldwell,
Presidents of the Federal Reserve Banks of
Philadelphia, Atlanta, Kansas City, and
Dallas, respectively
Mr. Holland, Secretary
Mr. Sherman, Assistant Secretary
Mr. Kenyon, Assistant Secretary
Mr. Broida, Assistant Secretary
Mr. Molony, Assistant Secretary
Mr. Hackley, General Counsel
Mr. Brill, Economist
Messrs. Baughman, Garvy, Hersey, Partee,
Parthemos, and Solomon, Associate
Economists
Mr. Holmes, Manager, System Open Market Account

2/6/68
Messrs. Cardon and Fauver, Assistants to
the Board of Governors
Messrs. Axilrod and Gramley, Advisers,
Division of Research and Statistics,
Board of Governors
Mr. Reynolds, Associate Director, Division
of International Finance, Board of
Governors
Mr. Wernick, Associate Adviser, Division
of Research and Statistics, Board of
Governors
Mr. Keir, Assistant Adviser, Division of
Research and Statistics, Board of
Governors
Mr. Bernard, Special Assistant, Office of
the Secretary, Board of Governors
Miss Eaton, General Assistant, Office of
the Secretary, Board of Governors
Miss McWhirter, Analyst, Office of the
Secretary, Board of Governors
Mr. Heflin, First Vice President of the
Federal Reserve of Richmond
Messrs. Eastburn, Mann, Taylor, Andersen,
Tow, and Green, Vice Presidents of the
Federal Reserve Banks of Philadelphia,
Cleveland, Atlanta, St. Louis, Kansas
City, and Dallas, respectively
Messrs. Bodner and Meek, Assistant Vice
Presidents, Federal Reserve Bank of
New York
Mr. Anderson, Financial Economist, Federal
Reserve Bank of Boston
Mr. Runyon, Economist, Federal Reserve
Bank of San Francisco
Mr. Kareken, Consultant, Federal Reserve
Bank of Minneapolis
By unanimous vote, the minutes of actions taken at the
meeting of the Federal Open Market Committee held on January 9,
1968, were approved.
The memorandum of discussion for the meeting of the Federal
Open Market Committee held on January 9, 1968, was accepted.

-3

2/6/68

By unanimous vote, the System open market transactions in
foreign currencies during the period January 9 through February 5,
1968, were approved, ratified, and confirmed.
By unanimous vote, the open market transactions in Govern
ment securities, agency obligations, and bankers' acceptances
during the period January 9 through February 5, 1968, were approved,
ratified, and confirmed.
By unanimous vote, the Federal Reserve Bank of New York was
authorized and directed, until otherwise directed by the Committee,
to execute transactions in the System Account in accordance with
the following current economic policy directive:
The information reviewed at this meeting indicates
that over-all economic activity has been expanding
rapidly, with both industrial and consumer prices
rising at a substantial rate, and that prospects are for
continuing rapid growth and persisting inflationary
pressures in the period ahead. The imbalance in U.S.
international transactions worsened further in late
1967, primarily because of a sharp reduction in the
surplus on merchandise trade. Although day-to-day
money market rates have remained firm, rates on other
short-term instruments have declined recently; meanwhile,
long-term bond yields have fluctuated irregularly below
the peaks reached late last year. Growth in bank credit
resumed in January, reflecting both loan expansion
around the year end and Treasury financing. The money
supply expanded sharply following earlier slackening,
but flows into time and savings accounts at bank and
nonbank financial intermediaries have continued to
moderate. In this situation, it is the policy of the
Federal Open Market Committee to foster financial
conditions conducive to resistance of inflationary
pressures and progress toward reasonable equilibrium
in the country's balance of payments.

2/6/68
To implement this policy, while taking account of
Treasury financing activity, System open market opera
tions until the next meeting of the Committee shall be
conducted with a view to maintaining firm conditions

in the money market, and operations shall be modified
to the extent permitted by Treasury financing if bank
credit appears to be expanding as rapidly as is
currently projected.
It was agreed that the next meeting of the Committee, which
would be the annual organizational meeting, would be held on
Tuesday, March 5, 1968, at 9:30 a.m.
The meeting adjourned.

Secretary