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SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 1
I.
INTRODUCTION
A.
I WILL COMMENT ON THE ECONOMY, ON RECENT
MONETARY POLICY ACTIONS, AND SOME
CURRENT LEGISLATIVE ISSUES THAT THE
FEDERAL RESERVE SYSTEM IS DEALING WITH.
II.
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Federal Reserve Bank of St. Louis
FIRST, WITH REGARD TO THE ECONOMY
A.
AT THE OUTSET, LET ME SAY THAT
1994
HAS
STARTED OFF FAR DIFFERENTLY THAN WAS THE
CASE LAST YEAR.
1.
You
WILL REMEMBER THAT
1992
ENDED ON
A COMPARATIVELY STRONG NOTE.
2.
BUT THEN AS WE GOT INTO THE EARLY
PART OF
1993,
THERE WAS A VERY
CONSIDERABLE FALL-OFF IN ECONOMIC
ACTIVITY.
3.
AT THAT POINT WE WERE STILL GOING
THROUGH THE CORRECTIVE PROCESS OF
RESTRUCTURING OUR FINANCIAL SYSTEM
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 2
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Federal Reserve Bank of St. Louis
AND THAT CORRECTIVE PROCESS WAS
INHIBITING ECONOMIC GROWTH.
B.
WITHOUT SPENDING A LOT OF TIME GOING
BACK OVER NOW VERY OLD GROUND AS WE CAME
OUT OF THE DECADE OF THE
'80s,
THAT
PERIOD OF VERY STRONG GROWTH,
1.
WE HAD BUILT SOME VERY SIGNIFICANT
FINANCIAL~ALANCES INTO THE SYSTEM
THAT WERE REALLY VERY THREATENING.
2.
THE NECESSARY CORRECTIVE PROCESS
ENSUED
3.
AND THAT WAS THE PERIOD DURING WHICH
CHAIRMAN GREENSPAN FREQUENTLY
REFERRED TO THE VERY STRONG
HEADWINDS THAT WERE HOLDING BACK
ECONOMIC GROWTH AT A LEVEL THAT HAS
BEEN SO TYPICAL OF OUR PRIOR
POST-WWII RECOVERIES AND EXPANSIONS.
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 3
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Federal Reserve Bank of St. Louis
C.
BUT A VERY GREAT DEAL HAS BEEN
ACCOMPLISHED DURING THE LAST FEW YEARS
TO RESOLVE THESE IMBALANCES AND THE
VELOCITY OF THE HEADWINDS HAS DIMINISHED
VERY CONSIDERABLY.
1.
AND THAT'S WHY THIS YEAR IS SO VERY
DIFFERENT FROM LAST YEAR.
2.
I
WILL ADMIT THAT LAST YEAR ONCE
AGAIN ENDED ON A VERY STRONG NOTE
(THE SEVEN PERCENT GROWTH RATE
EMPHASIZES THAT POINT).
3.
AND THOUGH THE FIRST QUARTER OF THIS
YEAR CERTAINLY WILL NOT INDICATE
NUMBERS IN THAT MAGNITUDE,
A.
NONETHELESS, IT WILL HAVE BEEN A
GOOD QUARTER AND THAT IS
CONTINUING INTO THE SECOND
QUARTER.
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 4
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Federal Reserve Bank of St. Louis
4.
THE CURRENT UNDERLYING LEVEL OF
ECONOMIC ACTIVITY IS REALLY VERY
STRONG AND THAT'S PARTICULARLY TRUE
IN OUR DISTRICT.
A.
THE AUTOMOTIVE SECTOR IS A
STANDOUT IN THIS REGARD AND
BECAUSE OF THE IMPACT THAT THIS
ONE SECTOR HAS ON THE OVERALL
ECONOMY, IT HAS CERTAINLY BEEN A
MAJOR ELEMENT IN THE CURRENT
LEVEL OF ECONOMIC STRENGTH.
(I)
SECOND QUARTER DOMESTIC
PRODUCTION SCHEDULES,
WHILE LOWER THAN THE FIRST
QUARTER, ARE HIGHER THAN
LAST YEAR.
(II)
IN SOME RESPECTS THE
SMALLER INCREASE RESULTS
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 5
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Federal Reserve Bank of St. Louis
FROM CAPACITY SHORTAGES
WITH SOME OF THE BETTER
MODELS.
.
(III) THIS CAPACITY ISSUE IN THE
AUTO INDUSTRY IS CERTAINLY
A NEW AND VERY DIFFERENT
ELEMENT.
(IV)
AFTER YEARS OF THE
UNENDING SERIES OF
ANNOUNCEMENTS OF LAYOFFS
AND PLANT SHUT DOWNS,
(v)
Now
THE INDUSTRY IS
STRUGGLING TO ADD CAPACITY
TO PROVIDE AN ADEQUATE
PRODUCTION.
B.
THE HEAVY TRUCK INDUSTRY IS ALSO
EXPERIENCING STRONG GROWTH WITH
THE LIKELIHOOD THAT THIS YEAR
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 6
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Federal Reserve Bank of St. Louis
WILL BE A RECORD YEAR.
C.
THE TRUCKING INDUSTRY IS FACING
A CAPACITY SHORTAGE -(I)
THERE JUST AREN'T ENOUGH
QUALIFIED DRIVERS
AVAILABLE.
(II)
TRUCK TRAILERS ARE ALSO IN
SHORT SUPPLY AND I AM TOLD
THAT DELIVERY TIMES HAVE
LENGTHENED OUT TO APRIL
1995.
D.
GIVEN THE STRENGTHS IN THESE TWO
SECTORS, NOT SURPRISINGLY, THE
STEEL INDUSTRY IS ALSO OPERATING
AT HIGH LEVELS, REALLY ALMOST
FLAT OUT.
(I)
IRONICALLY, THE VOLUME OF
IMPORTED STEEL WILL RISE
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 7
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Federal Reserve Bank of St. Louis
QUITE SIGNIFICANTLY BUT
FOR A DIFFERENT REASON --
DOMESTIC STEEL COMPANIES
WILL BE IMPORTING A HIGHER
LEVEL OF SEMI-FINISHED
PRODUCTS BECAUSE OF THEIR
OWN CAPACITY AND
STRENGTHS.
D.
RETAIL SALES ARE ALSO DOING VERY
WELL.
(I)
DESPITE THE VERY ADVERSE
WEATHER THAT WE
EXPERIENCED IN FEBRUARY,
SOME RETAILERS ENJOYED A
SOLID DOUBLE DIGIT SALES
GAIN ON A COMP STORE
BASIS.
(II)
AND THE LARGE RETAIL SALES
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 8
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Federal Reserve Bank of St. Louis
NUMBERS THAT HAVE BEEN
COMING IN WOULD CERTAINLY
INDICATE THAT THE STRENGTH
HAS BEEN CARRYING OVER.
0.
WITH THESE BASIC INDUSTRIES DOING SO
WELL AND IN SOME CASES DEALING WITH
CAPACITY CONSTRAINTS IT'S VERY LOGICAL
TO SHIFT ONE'S THINKING TO THE
INFLATIONARY CONSEQUENCES OF ALL OF
THIS.
1. So
FAR THE DATA WOULD NOT SUGGEST
THAT PRICE PRESSURES ARE BEGINNING
TO BUILD UP.
2.
BUT THE DATA IS AFTER THE FACT AND
IN TERMS OF MONETARY POLICY OUR JOB
IS TO
----
THE PRICE PRESSURES
BEFORE THEY GET INTO THE NUMBERS.
3.
AND
I WILL SAY THAT AS I TALK WITH
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 9
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Federal Reserve Bank of St. Louis
PEOPLE IN THE DISTRICT, I DO HAVE A
SENSE THAT AFTER A LONG PERIOD OF
DECLINES IN MANY MAJOR PRICES WE ARE
SEEING SIGNS OF AT LEAST
STABILIZATION.
4.
IT IS ALSO IMPORTANT TO NOTE THAT
LABOR COSTS CONTINUE UNDER VERY GOOD
CONTROL.
A.
UNION CONTRACTS THREE TO FOUR
YEARS IN LENGTH ARE STILL BEING
NEGOTIATED WITH WAGE INCREASES
THAT ARE VERY MANAGEABLE.
B.
THESE INCREASES ARE BEING WELL
HANDLED BY VERY LARGE GAINS IN
PRODUCTIVITY.
C.
IF YOU LOOK AT THE PRODUCTIVITY
GAINS THAT THE MANUFACTURING
SECTOR HAS AND CONTINUES TO
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 10
ACHIEVE, THE NUMBERS ARE REALLY
VERY IMPRESSIVE AND REASSURING.
D.
AND LABOR COSTS ARE A VERY
IMPORTANT COMPONENT OF THE
MANUFACTURED PRODUCT.
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AND OFFSETTING THE PRESSURES THAT WE
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Federal Reserve Bank of St. Louis
UJ
SERVICE SECTOR ARE CLEARLY SLOWING
DOWN.
A.
FOR MANY YEARS PRICE INCREASES
IN THE SERVICE SECTOR SUCH AS
HEALTH CARE, ETC., WERE VIEWED
AS BEING ABSOLUTELY INTRACTABLE.
B.
CURRENT DATA SUGGESTS THAT THEY
ARE NOT AND THAT THIS IMPORTANT
PART OF OUR ECONOMY IS
EXPERIENCING THE SAME TYPE OF
\
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 11
RESTRUCTURING THAT WAS THE CASE
IN THE MANUFACTURING SECTOR IN
THE MID-8O's AND THAT THE MARKET
PROCESS IS PLACING A HEAVY
RESTRAINT ON SERVICE SECTOR
PRICE INCREASES.
C.
AND AS AN ASIDE, I WOULD NOTE
THAT THIS PROCESS STARTED BEFORE
THE ADMINISTRATION INTRODUCED
THE PROPOSAL TO SIGNIFICANTLY
MODIFY HEALTH CARE.
Ill.
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Federal Reserve Bank of St. Louis
WITH THAT AS BACKGROUND, LET ME SHIFT TO
SOME COMMENTS ABOUT OUR RECENT MONETARY
POLICY ACTIONS.
A.
As YOU KNOW, ON FEBRUARY 4, THE FEDERAL
OPEN MARKET COMMITTEE MADE A POLICY
CHANGE TOWARD GREATER RESTRAINT AND IN
AN UNPRECEDENTED MOVE, IMMEDIATELY
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 12
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Federal Reserve Bank of St. Louis
ANNOUNCED THE CHANGE.
1.
THE MARKET REACTION WAS, I THOUGHT,
SURPRISINGLY ADVERSE.
2.
JUST SHORTLY BEFORE THAT CHANGE,
CHAIRMAN GREENSPAN HAD TESTIFIED
BEFORE A CONGRESSIONAL COMMITTEE.
A.
I
READ THE TESTIMONY CAREFULLY
AND IT SEEMED TO ME THAT IT
PROVIDED A CLEAR INDICATION THAT
THERE MIGHT BE A NEAR-TERM
POLICY CHANGE.
B.
THE FEDERAL OPEN MARKET
COMMITTEE AGAIN
ON MARCH
HANGED POLICY
1
22, JUST ABOUT THREE
WEEKS AGO AND AGAIN MADE AN
ANNOUNCEMENT AT THE TIME
~--~----3.
THE IMMEDIATE REACTION TO THE
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 13
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Federal Reserve Bank of St. Louis
CHANGE WAS QUITE POSITIVE BUT THEN
SUBSEQUENTLY THERE WAS AGAIN AN
ADVERSE REACTION.
C.
WHILE IT IS DIFFICULT TO KNOW JUST WHY
THE MARKETS HAVE RESPONDED IN THE WAY
THAT THEY HAVE, IT SEEMS TO ME THAT THE
FOLLOWING MAY HAVE CONTRIBUTED TO IT:
1.
FOLLOWING A FIVE-YEAR PERIOD DURING
WHICH THE POLICY MOVES HAD BEEN
TOWARD EASE, THIS WAS THE FIRST
TIGHTENING MOVE.
A.
DESPITE THE ANTICIPATION THAT
MANY MAY HAVE HAD, A CHANGE IN
DIRECTION ALWAYS COMES, IF NOT
AS A SHOCK, THEN CERTAINLY AS A
REMINDER THAT THE DIRECTION HAS
CHANGED.
2.
THERE SEEMS TO BE A CONSIDERABLE
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 14
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Federal Reserve Bank of St. Louis
LEVEL OF UNCERTAINTY ABOUT
POLICY ACTIONS AND THERE ARE MANY
CONFLICTING VIEWS.
----
A.
IN THIS ENVIRONMENT WE ARE BOUND
TO BE SURPRISED BY CHANGES
BECAUSE OUR EXPECTATIONS HAD
BEEN QUITE DIFFERENT.
3.
WHILE HARD TO QUANTIFY, IT IS CLEAR
THAT SOME MARKET PARTICIPANTS HAD
HIGHER LEVERAGED POSITIONS WHICH HAD
TO BE UNWOUND.
A.
AND IN THAT PROCESS THE
UNSETTLED MARKET CONDITIONS WERE
ONLY EXACERBATED.
B.
AND THIS SERVED TO AMPLIFY THE
MAGNITUDE OF THE MARKET
ADJUSTMENT.
4.
AGAINST THE YEN, THE DOLLAR HAS BEEN
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 15
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Federal Reserve Bank of St. Louis
UNDER A GREAT DEAL OF PRESSURE.
A.
BECAUSE SOME OF THE VALUE OF THE
DOLLAR _ _ _ _ _ _ _ PORTFOLIOS
HAVE DEPRECIATED WITH THE FALL
OF THE VALUE OF THE DOLLAR.
B.
THIS HAS PROMPTED SOME OF THESE
PORTFOLIO MANAGERS TO REDUCE
THEIR POSITIONS ADDING FURTHER
TO THE DOWNWARD PRESSURE ON
PRICES PARTICULARLY IN THE BOND
AND STOCK MARKETS.
5.
FINALLY, AS
I
SUGGESTED JUST A FEW
MINUTES AGO, THE ECONOMY IS MOVING
AT A SOLID RATE AND WHILE AS
I
NOTED, THE CURRENT DATA DOES NOT
REFLECT UPWARD MOVEMENT IN PRICES.
6.
THERE ARE AT LEAST QUESTIONS BY SOME
AS TO WHETHER OR NOT THE CURRENT
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 16
CONDITIONS OF REASONABLE
STABILITY CAN BE SUSTAINED.
7.
THIS UNCERTAINTY ALSO PUTS DOWNWARD
PRESSURE ON FINANCIAL ASSET PRICES.
IV.
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Federal Reserve Bank of St. Louis
LET ME SHIFT IF
I
MIGHT FOR A MINUTE OR TWO
TO SOME OF THE LEGISLATIVE ISSUES THAT THE
FEDERAL RESERVE IS DEALING WITH.
A.
FOR REASONS THAT ARE A LITTLE HARD TO
UNDERSTAND, THE SYSTEM IS UNDER A GREAT
DEAL OF LEGISLATIVE PRESSURE, BOTH WITH
REGARD TO OUR STRUCTURE AS WELL AS TO
OUR PROCEDURES.
1.
BILLS HAVE BEEN INTRODUCED IN BOTH
THE SENATE AND THE HOUSE THAT WOULD
SIGNIFICANTLY ALTER THE ROLE OF THE
RESERVE BANK PRESIDENTS IN THE
MONETARY POLICY PROCESS.
A.
ONE VERSION WOULD CONVERT
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 17
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Federal Reserve Bank of St. Louis
RESERVE BANK PRESIDENTS FROM
PRIVATE INDIVIDUALS TO PUBLIC
OFFICIALS AND THE OTHER VERSION
WOULD TAKE THE PRESIDENTS OFF OF
THE OPEN MARKET COMMITTEE AS
VOTING MEMBERS.
2.
EITHER VERSION DRAMATICALLY CHANGES
A STRUCTURE THAT IN SOME RESPECTS
HAS BEEN IN PLACE FOR
80 YEARS, AND
IN OTHER RESPECTS FOR ALMOST
60
YEARS, AND HAS SERVED THIS COUNTRY
VERY WELL.
3.
WHILE AT THE END OF THE DAY IT DOES
NOT SEEM LIKELY TO ME THAT THE
CONGRESS WOULD BE WILLING OR WOULD
REALLY WANT TO MAKE THESE CHANGES,
THERE IS A RISK WHICH WE ARE VERY
ALERT TO.
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 18
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Federal Reserve Bank of St. Louis
B.
OF MORE IMMEDIATE CONCERN IS THE
ADMINISTRATION'S PROPOSAL TO CONSOLIDATE
THE FEDERAL FINANCIAL REGULATORY SYSTEM
INTO A SINGLE REGULATORY BODY.
1.
WHEN FIRST INTRODUCED, THIS PROPOSAL
HAD SOME INITIAL APPEAL -- THE
CURRENT STRUCTURE IS VERY
FRACTIONALIZED AND CERTAINLY NEEDS
TO BE SIMPLIFIED.
2.
BUT THE PROPOSAL WOULD TAKE THE
FEDERAL RESERVE SYSTEM OUT OF THE
SUPERVISORY BUSINESS AND WE FEEL
VERY STRONGLY THAT THIS WOULD BE A
BIG MISTAKE.
A.
WE NEED TO HAVE A DIRECT
HANDS-ON SUPERVISORY INVOLVEMENT
IN ORDER TO DEAL WITH OUR
MONETARY POLICY
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 19
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Federal Reserve Bank of St. Louis
RESPONSIBILITIES.
3.
IT IS MY VIEW THAT THE FEDERAL
RESERVE, AS THE NATION'S CENTRAL
BANK, HAS THE OVERRIDING
RESPONSIBILITY FOR THE INTEGRITY OF
THE FINANCIAL SYSTEM.
A.
IF PROBLEMS DEVELOP WITHIN THE
SYSTEM, EVEN IN THOSE PARTS
WHERE WE DO NOT HAVE SPECIFIC
SUPERVISORY AUTHORITY, WE NEED
TO DEAL WITH THEM AND IT IS OUR
ROLE IN BANKS AND BANK HOLDING
COMPANY SUPERVISION THAT
PROVIDES THE VEHICLE FOR THIS
RESPONSE.
4.
IN MY EXPERIENCE AT THE CHICAGO FED,
I
HAVE EXPERIENCED MANY ISSUES,
PARTICULARLY IN
1987
AND
1989,
WHERE
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 20
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Federal Reserve Bank of St. Louis
PROBLEMS THAT COULD HAVE BEEN
SYSTEMIC IN NATURE BEGAN TO EMERGE.
A.
OUR SUPERVISORY POSITION ENABLED
US TO RESOLVE THESE PROBLEMS
BEFORE THEY BECAME PUBLIC AND
EXPLODED ONTO THE SCENE.
5.
SINCE THE INTRODUCTION OF THE
PROPOSAL, THERE HAS BEEN A CLEAR
SHIFT IN MOMENTUM AND IT IS MY SENSE
THAT THE MARKET PARTICIPANTS
THOROUGHLY SUPPORT THE FED'S ROLE ON
THIS ISSUE AND THE PROPOSAL THAT WE
HAVE MADE.
A.
OUR PROPOSAL WOULD SIGNIFICANTLY
SIMPLIFY THE SYSTEM AND WOULD
ELIMINATE THE UNNECESSARY
_ _ _ _ _ _ AND WOULD
MAINTAIN OUR SUPERVISORY ROLE IN
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 21
A WAY THAT WOULD ENABLE US TO
DEAL WITH OUR MONETARY POLICY
RESPONSIBILITIES.
6.
WHILE IT IS HARD TO JUDGE JUST HOW
THIS ISSUE WILL ULTIMATELY EVOLVE,
FROM THE LEGISLATIVE PROCESS I DO
THINK THAT THERE IS A GOOD
OPPORTUNITY TO GET LEGISLATION
PASSED THAT WILL DEAL WITH OUR
CONCERNS BUT AT THE SAME TIME RESULT
IN A MUCH BETTER SUPERVISORY
STRUCTURE FOR THE FINANCIAL SYSTEM.
V.
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Federal Reserve Bank of St. Louis
IN CONCLUSION, IT SEEMS TO ME WE ARE AT ONE
OF THOSE TIMES WHEN EVERYTHING IS GOING JUST
ABOUT RIGHT.
A.
As I SUGGEST, THE ECONOMY IS STRONG AND
SUSTAINABLY SO.
1.
AND WHILE WE MUST BE ALERT TO
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 22
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Federal Reserve Bank of St. Louis
RENEWED PRICE PRESSURES, OUR OUTLOOK
FOR INFLATION CONTINUES TO BE
CONSTRUCTIVE AND THE RECENT POLICY
MOVES SHOULD SERVE AS A REMINDER TO
THE MARKETS OF OUR CONTINUING AND
OVERRIDING COMMITMENT TO PREVENT THE
REOCCURRENCE OF THE VIRULENT
INFLATIONARY CONDITIONS THAT SO
- - - - - - - - THE LATE 197Os AND
THE EARLY YEARS OR SO IN THE
8.
198Os.
GIVEN ALL THIS, IT DOES SEEM TO ME THAT
WE MAY HAVE JUST ESTABLISHED THE
CONDITIONS FOR A PERIOD OF GOOD,
SUSTAINED ECONOMIC GROWTH AND AN
ENVIRONMENT OF REASONABLE PRICE
STABILITY AND THAT, IT SEEMS TO ME, IS
ABOUT AS POSITIVE A PROJECTION AS ONE
CAN MAKE.
SILAS KEEHN
KALAMAZOO COUNTY CHAMBER
OF COMMERCE PERCOLATOR CLUB
KALAMAZOO, MICHIGAN
APRIL 14, 1994 - PAGE 23
THANK
YOU.
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Federal Reserve Bank of St. Louis