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Federal Open Market Committee

Conference Call September 8, 1983


Volcker, Chairman
Solomon, Vice Chairman (Board)

Mr. Keehn
Mr. Martin (Telephone)
Mr. Morris
Mr. Partee
Mr. Rice
Mr. Roberts
Mrs. Teeters
Messrs. Boehne, Boykin, Corrigan, and Mrs. Horn,
Alternate Members of the Federal Open Market
Mr. Black, President, Federal Reserve Bank of
Mr. Axilrod, Staff Director and Secretary
Mr. Bernard, Assistant Secretary
Mrs. Steele, Deputy Assistant Secretary
Mr. Bradfield, General Counsel
Mr. Kichline, Economist
Mr. Truman, Economist (International)
Mr. Coyne, Assistant to the Board, Office of Board
Members, Board of Governors
Mr. Sternlight, Manager for Domestic Operations,
System Open Market Account
Mr. Cross, Manager for Foreign Operations,
System Open Market Account (Board)
Mr. Forrestal, First Vice President, Federal
Reserve Bank of Atlanta

Transcript of Federal Open Market Committee Conference Call of
September 8, 1983
CHAIRMAN VOLCKER. I'd like to take advantage of this
[consultation] for two reasons. One is just to get any comments or
reflections that any of you might have on perceptions of what is going
on in the economy or inflation; the other is more directly in terms of
the policy decided upon [at the last meeting].
We have gone somewhat
toward the lower end of the specific range we were talking about in
terms of reserve pressures at the meeting. The directive clearly
contemplated less than that if there was weakness in the aggregates,
particularly if it was not accompanied by signs of increased economic
activity. And I would interpret that at the moment as moving--or at
least making our errors--on the slightly easier side and not doing
anything very drastic, depending upon what happens in the first part
of September. If the aggregates came in low then, we would continue
to move in that direction; if there were a tendency to reverse what
has happened recently, we would stop moving in that direction.
Conceivably, if growth were high enough, we'd go back to where we
were. So, we're in that kind of posture at the moment of leaning a
little toward the easier side, fully in accordance with the directive.
[Secretary's note: The transcript record has an ellipsis at
this point, indicating that the ensuing discussion was not
CHAIRMAN VOLCKER. Anyone else? I do not hear any comments
that suggest a great sea change is going on in the direction of
economic activity at this point, and I think that reinforces a feeling
that the directive calls for some move here, but it is not going to be
very dramatic.
MR. PARTEE. By "some move," Paul, do you mean just a little
easing within that boundary on borrowings that we were talking about?

Beyond that?


No, it goes beyond that.

But not much.

It could go--

How much beyond that?

MR. GUFFEY. What are you proposing, Mr. Chairman:
borrowing level to achieve a bit of easing?

a lower

CHAIRMAN VOLCKER. You know, this is partly an art, but I
think I would aim at $700 million or a little less.
[Secretary's note:

The transcript ends at this point.]