The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Federal Open Market Committee Conference Call July 2, 1992 PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Ms. Mr. Greenspan, Chairman Corrigan, Vice Chairman Angell Hoenig (Board) Kelley LaWare Lindsey Mullins Phillips Syron (Board) Messrs. Boehne, McTeer (Board), and Keehn, Alternate Members of the Federal Open Market Committee Messrs. Black, Forrestal, and Parry, Presidents of the Federal Reserve Banks of Richmond, Atlanta, and San Francisco, respectively Mr. Mr. Mr. Mr. Kohn, Secretary and Economist Bernard, Deputy Secretary Coyne, Assistant Secretary Gillum, Assistant Secretary Messrs. Davis, Lindsey, Siegman, and Simpson, Associate Economists Mr. McDonough, Manager for Foreign Operations, System Open Market Account Mr. Wiles, Secretary of the Board, Office of the Secretary, Board of Governors Mr. Ettin, Deputy Director, Division of Research and Statistics, Board of Governors Ms. Low, Open Market Secretariat Assistant, Division of Monetary Affairs, Board of Governors Messrs. Bowen, Gainor (Richmond), and Oltman, First Vice Presidents, Federal Reserve Banks of St. Louis, Minneapolis, and New York respectively Ms. Lovett, Senior Vice President, Federal Reserve Bank of New York Transcript of Federal Open Market Committee Conference Call July 2, 1992 CHAIRMAN GREENSPAN. Good morning, everyone. The Board a few minutes ago voted 7 to 0 to lower the discount rate from 3-1/2 to 3 I suspect that today's data suggest that M2's weakness may percent. be more relevant than we had been expecting. I might also say, incidentally, that this afternoon we will be publishing an unexpectedly large decline in M2 of $10.6 billion for the latest week; and at this stage preliminary numbers for the subsequent week show modest further declines. Let me read the official text that we will release at 9:15 "The Federal Reserve Board today approved a a.m. this morning: reduction in the discount rate from 3-1/2 percent to 3 percent, effective immediately. Action was taken in light of sustained weakness in credit and money growth, continued movement toward price stability, and the uneven progress of the economic recovery. In making the change the Board voted on a recommendation submitted by the board of directors of the Federal Reserve Bank of Chicago. The discount rate is the interest rate that is charged depository institutions when they borrow from their regional Federal Reserve Banks." End of press release. I intend to allow the 50 basis point reduction in the discount rate to pass through fully to the funds rate. Are there any comments? MR. BLACK. Bob Black. It seems appropriate to me, Mr. Chairman; CHAIRMAN GREENSPAN. this is Thank you. I think you could MR. KEEHN. This is Si Keehn in Chicago. tell from my comments yesterday as well as the action of our directors last week that we completely endorse the action you've taken. MR. FORRESTAL. This is Bob Forrestal in Atlanta; it's entirely appropriate, Mr. Chairman. I think MR. BOEHNE. This is Ed Boehne in Philadelphia. I obviously I wonder if you clearly have to send out this one agree with it. Reserve Bank announcement because that's the only thing you had to act on this morning. My own board is going to meet in about ten minutes in a regularly scheduled meeting and I'm sure they're going to go along with everyone else. It may be possible to make this look a I'd rather not have this little broader as we go through the day. action possibly viewed as the Board in Washington versus the Reserve I just wondered if there's some Banks, which is surely not the case. way we can make this look a little broader in terms of Reserve Banks [included in the announcement]. MR. ANGELL. Ed, this is Wayne Angell. Really, the money markets don't need any broadening here, and once we start that I think it's best to do as process we really have no way to end it. we've been doing in the past because the money markets don't need a lot of support. A 7 to 0 vote speaks for itself. MR. COYNE. Mr. Chairman, typically we release each Reserve For example, if we got three or four Bank's action as it comes in. 7/2/92 Reserve Banks in by 11 a.m., we'd release them separately. CHAIRMAN GREENSPAN. Yes, if we can get a number of Reserve Banks in sometime today, I think that would be very helpful. MR. BLACK. 9:30 a.m.? Mr. Chairman, did I understand you to say 9:15 or CHAIRMAN GREENSPAN. 9:15. VICE CHAIRMAN CORRIGAN. This is Jerry Corrigan. I think you should just go ahead and make the announcement. Obviously, I will get my board together this morning too; and though I agree philosophically with Ed's point, this is too important to be tinkering. I would just go ahead. MR. HOENIG. This is Tom Hoenig; I certainly agree with the immediate announcement and with [unintelligible]. CHAIRMAN GREENSPAN. much, everybody. Any further comments? END OF SESSION Thank you very
@FedFRASER