The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Meeting of Federal Open Market Committee November 16, 1971 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.C., on Tuesday, November 16, 1971, at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Burns, Chairman Hayes, Vice Chairman Brimmer Clay Daane Kimbrel Maisel Mayo Mitchell Morris Robertson Messrs. Coldwell, Eastburn, Swan, and Winn, Alternate Members of the Federal Open Market Committee Messrs. Heflin and MacLaury, Presidents of the Federal Reserve Banks of Richmond and Minneapolis, respectively Mr. Holland, Secretary Mr. Broida, Deputy Secretary Messrs. Bernard and Molony, Assistant Secretaries Mr. Hackley, General Counsel Mr. Partee, Economist Messrs. Axilrod, Eisenmenger, Gramley, Hersey, Scheld, Solomon, Taylor, and Tow, Associate Economists Mr. Holmes, Manager, System Open Market Account Mr. Coombs, Special Manager, System Open Market Account 11/16/72 Mr. Altmann, Assistant Secretary, Office of the Secretary, Board of Governors Mr. Chase, Deputy Director, Division of Research and Statistics, Board of Governors Messrs. Wernick and Williams, Advisers, Division of Research and Statistics, Board of Governors Mr. Keir, Associate Adviser, Division of Research and Statistics, Board of Governors Mr. Gemmill, Associate Adviser, Division of International Finance, Board of Governors Mr. Zeisel, Assistant Adviser, Division of Research and Statistics, Board of Governors Mr. Wendel, Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Miss Eaton, Open Market Secretariat Assistant, Office of the Secretary, Board of Governors Mrs. Rehanek, Secretary, Office of the Secretary, Board of Governors Mr. Leonard, First Vice President, Federal Reserve Bank of St. Louis Messrs. Parthemos and Craven, Senior Vice Presidents, Federal Reserve Banks of Richmond and San Francisco, respectively Messrs. Boehne, Hocter, and Green, Vice Presidents, Federal Reserve Banks of Philadelphia, Cleveland, and Dallas, respectively Mr. Kareken, Economic Adviser, Federal Reserve Bank of Minneapolis Messrs. Meek, Puckett, and Bowsher, Assistant Vice Presidents, Federal Reserve Banks of New York, New York, and St. Louis, respectively By unanimous vote, the minutes of actions taken at the meeting of the Federal Open Market Committee held on October 19, 1971, were approved. 11/16/71 The memorandum of discussion for the meeting of the Federal Open Market Committee on October 19, 1971, was accepted. By unanimous vote, the System open market transactions in foreign currencies during the period October 19 through November 15, 1971, were approved, ratified, and confirmed. By unanimous vote, the Committee approved the renewal for further periods of one year of the following swap arrangements, having the indicated amounts and maturity dates, subject to a determination by Chairman Burns that such action was in the national interest: Amount of Foreign bank Austrian National Bank National Bank of Belgium Bank of Canada National Bank of Denmark Bank of England Bank of France German Federal Bank Bank of Italy Bank of Japan Bank of Mexico Netherlands Bank Bank of Norway Bank of Sweden Swiss National Bank Bank for International Settlements: Dollars against Swiss francs Dollars against authorized Euro pean currencies other than Swiss francs arrangement (millions of dollars equivalent) Maturity date 200 600 1,000 200 2,000 1,000 1,000 1,250 1,000 130 300 200 250 1,000 December December December December December December December December December December December December December December 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 1971 600 December 2, 1971 1,000 December 2, 1971 Secretary's note: Chairman Burns made the indicated determination on November 30, 1971. 11/16/71 By unanimous vote, the open market transactions in Govern ment securities, agency obligations, and bankers' acceptances during the period October 19 through November 15, 1971, 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 executive transactions in the System Account in accordance with the following current economic policy directive: The information reviewed at this meeting indicates that real output of goods and services expanded mod estly in the third quarter, but greater growth appears in prospect for the current quarter. Although the unemployment rate has declined recently, it remains high. Available data indicate that the 90-day freeze effectively limited increases in price and wages, and basic policies for the post-freeze stabilization program have been announced. The narrowly defined money stock declined further in October, but inflows of consumer type time and savings deposits to banks expanded consid erably and the broadly defined money stock increased moderately. Expansion in the bank credit proxy slowed substantially as the volume of large-denomination CD's outstanding rose less than in September and as U.S. Gov ernment deposits were reduced. Interest rates on both short- and long-term market securities have continued to decline in recent weeks and Federal Reserve discount rates were reduced by one-quarter of a percentage point to 4-3/4 per cent. The U.S. foreign trade balance was raised in September by a sharp acceleration of export shipments in advance of an East Coast port strike. In recent weeks net outflows of short-term capital appar ently have diminished further, market exchange rates for foreign currencies against the dollar on average have not changed much, and foreign official reserve holdings have increased less than they did in September. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster financial conditions consistent with the aims of the new governmental program, including sustainable real economic growth and 11/16/71 increased employment, abatement of inflationary pressures, and attainment of reasonable equilibrium in the country's balance of payments. To implement this policy, the Committee seeks to promote somewhat greater growth in monetary and credit System open market aggregates over the months ahead. operations until the next meeting of the Committee shall be conducted with a view to achieving bank reserve and money market conditions consistent with that objective. It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, December 14, 1971, at 9:30 a.m. The meeting adjourned. Secretary
@FedFRASER