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Meeting of Federal Open Market Committee
July 15, 1982
MINUTES OF ACTIONS

A meeting of the Federal Open Market Committee was held on
Thursday, July 15, 1982.

This was a telephone conference meeting, and

each individual was in Washington, D. C., except as otherwise indicated
in parentheses in the following list of those participating.
PRESENT:

Mr. Volcker, Chairman
Mr. Solomon, Vice Chairman
Mr. Balles
Mr. Black
Mr. Ford
Mrs. Horn
Mr. Martin
Mr. Partee
Mrs. Teeters

(New York)
(San Francisco)
(Richmond)
(Atlanta)
(Cleveland)

Messrs. Guffey (Kansas City), Keehn (Chicago), Roos (St. Louis),
and Timlen (New York), Alternate Members of the Federal
Open Market Committee
Messrs. Boehne (Philadelphia), Boykin (Dallas), and Corrigan
(Minneapolis), Presidents of the Federal Reserve Banks
of Philadelphia, Dallas, and Minneapolis, respectively
Mr. Axilrod, Staff Director
Mr. Altmann, Secretary
Mr. Bernard, Assistant Secretary
Mrs. Steele, Deputy Assistant Secretary
Mr. Bradfield, General Counsel
Mr. Oltman (New York), Deputy General Counsel
Mr. Kichline, Economist
Messrs. J. Davis (Cleveland), Keran (San Francisco), Koch
(Atlanta), Prell, Siegman, and Zeisel, Associate
Economists
Mr. Cross (New York), Manager for Foreign Operations,
System Open Market Account
Mr. Sternlight (New York), Manager for Domestic Operations,
System Open Market Account

7/15/82

Mr. Coyne, Assistant to the Board of Governors
Mr. McIntosh (Boston), First Vice President, Federal
Reserve Bank of Boston
Messrs. T. Davis (Kansas City), Eisenmenger (Boston),
and Stern (Minneapolis), Senior Vice Presidents,
Federal Reserve Banks of Kansas City, Boston,
and Minneapolis, respectively
Messrs. Broaddus (Richmond), Burger (St. Louis),
Nichols (Chicago), and Soss, Vice Presidents,
Federal Reserve Banks of Richmond, St. Louis,
Chicago, and New York, respectively
Mr. Lang (Philadelphia), Research Officer, Federal
Reserve Bank of Philadelphia
Mr. Pearce (Dallas), Assistant Vice President, Federal
Reserve Bank of Dallas
With Mrs. Teeters dissenting, the Committee reaffirmed the following
ranges for growth of the monetary aggregates over the year from the fourth
quarter of 1981 to the fourth quarter of 1982 that it had adopted in early
February:

for M1, 2-1/2 to 5-1/2 percent; for M2, 6 to 9 percent; and for M3,

6-1/2 to 9-1/2 percent.
cent.

The associated range for bank credit was 6 to 9 per

At the same time, the Committee agreed that growth in the monetary and

credit aggregates around the top of the indicated ranges would be acceptable
in the light of the relatively low base period for the M1 target and other
factors, and that it would tolerate for some period of time growth somewhat
above the target range should unusual precautionary demands for for money
and liquidity be evident in the light of current economic uncertainties.

-3-

7/15/82

By unanimous vote, the Committee indicated that for 1983 it
was tentatively planning to continue the current ranges for 1982, but
would review that decision carefully in the light of developments over
the remainder of 1982.
Secretary's note: Shortly afterwards, Messrs. Gramley, Rice,
and Wallich, who had been unable to attend this meeting but
who had been present for the main discussion of the longer-run
ranges for monetary growth held at the meeting on June 30
July 1, 1982, associated themselves with the Committee in its
actions with respect to the ranges for both 1982 and 1983.
Following the Committee's actions, the next to last paragraph of
the domestic policy directive adopted at its meeting on June 30-July 1 read
as follows:
The Federal Open Market Committee seeks to foster
monetary and financial conditions that will help to
reduce inflation, promote a resumption of growth in
output on a sustainable basis, and contribute to a
sustainable pattern of international transactions.
At its meeting in early February, the Committee had
agreed that its objectives would be furthered by
growth of M1, M2, and M3 from the fourth quarter of
1981 to the fourth quarter of 1982 within ranges of
2-1/2 to 5-1/2 percent, 6 to 9 percent, and 6-1/2 to
9-1/2 percent respectively. The associated range for
bank credit was 6 to 9 percent. The Committee began
a review of these ranges at its meeting on June 30
July 1, and at a meeting on July 15, it reaffirmed the
targets for the year set in February. At the same
time the Committee agreed that growth in the monetary
and credit aggregates around the top of the indicated
ranges would be acceptable in the light of the rela
tively low base period for the M1 target and other
factors, and that it would tolerate for some period
of time growth somewhat above the target range should
unusual precautionary demands for money and liquidity
be evident in the light of current economic uncertain
ties. The Committee also indicated it was tentatively
planning to continue the current ranges for 1983, but
would review that decision carefully in the light of
developments over the remainder of 1982.

7/15/82

-4

It was agreed that the next meeting of the Federal Open Market
Committee would be held on Tuesday, August 24, 1982, at 9:30 a.m.
The meeting adjourned.

Secretary