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fomc
1,978
The word "targets"?
5
fomc
1,978
Yes, rather than "guidelines" or "ranges."
12
fomc
1,978
"Ranges" is the word in the law.
10
fomc
1,978
The word "targets" is used in your next to last line on the first page.
18
fomc
1,978
The first [sentence] is right, though.
10
fomc
1,978
I was just hoping we'd stay away from that word.
11
fomc
1,978
Well, it says the objectives and plans with respect to the ranges of growth.
16
fomc
1,978
In the past, we've tried to stay away from the word target, if possible. [I'd start that sentence with] "These ranges or guides should..." It's semantics, I know.
37
fomc
1,978
These ranges or guides. Sure, why not? And the next [sentence] says "ranges." Okay. Do you want to move to proposal 2, Chuck?
34
fomc
1,978
Well, proposal 2 does get to the question of how we define the calendar year. There seem to be three possibilities. One could say that it's December to December. Well, I suppose one could say it's the last day of December to the last day of December, but in practical terms it's the month of December to the month of Dec...
300
fomc
1,978
May I speak to that? I'm not speaking with any great knowledge because, again, I haven't thought this out. But I'm wondering, Chuck, in terms of the midyear report where you've gone through half of the year and know what that average has been, at least in preliminary terms, and you have the remainder of that year to fo...
134
fomc
1,978
Or, alternatively, to have both of them.
10
fomc
1,978
I just don't know. I must say, as an economist who has been forecasting for a long time, that I can't even remember a year average on anything. I just never use it in analytic terms myself; maybe some people do. I think it's a very interesting device to create confusion because the year-over-year average is always diff...
164
fomc
1,978
You would adjust the current year upward.
8
fomc
1,978
You would adjust the current year upward and you could very well say we'll have a more gradual adjustment period that would run into the following year. That's the way I would use it rather than to take the yearly average.
43
fomc
1,978
I was trying to think of your comment in relation to the GNP number. If you use the GNP number, [after] the first [half] of the year, you know what your first half GNP has been. I guess forecaster minds work differently, but it seems to me that after I get past the first half I have some idea what that first half has a...
100
fomc
1,978
You mean so you get an average. I just never do that myself.
15
fomc
1,978
Chuck, you say you never do it. Almost all of the GNP figures that are discussed at this time of the year are yearly figures.
29
fomc
1,978
I never discuss the yearly figures; I think they're highly misleading.
13
fomc
1,978
You can't read the newspaper without reading that number.
10
fomc
1,978
I think it's become much more common to talk fourth quarter-to-fourth quarter. That's the way the Council [of Economic Advisers] presents their estimates of the GNP.
35
fomc
1,978
As a matter of fact, they're presented both ways. They still are. The budget document has year-over-year and the Council report has fourth quarter-to-fourth quarter. And they are a consistent set of numbers. I think people do them differently.
50
fomc
1,978
Jim, what do you use in the Greenbook?
11
fomc
1,978
Well, we present both but generally in the presentations here we talk about fourth-to-fourth.
19
fomc
1,978
And this Bluebook change figure, you use fourth quarter-to-fourth quarter rather than the average?
20
fomc
1,978
That's right--or third-to-third, say. In terms of the policy period, for example, it's the third quarter over the third quarter.
29
fomc
1,978
Those are all quarters, depending on the time period, Governor Coldwell, third-to-third, fourth-to-fourth, third-to-fourth. They're all quarter-to-quarter.
35
fomc
1,978
Well, point-to-point is just too sloppy. So it's some sort of period to another period. What is the sentiment here? Is this an issue on which there is a difference of opinion?
39
fomc
1,978
Do you contemplate that in the July report you would cast the discussion largely in terms of the change from the fourth quarter to the second quarter?
28
fomc
1,978
What's happened so far and what that implies for--
10
fomc
1,978
We wouldn't start one of these new periods from a base in July; we would go back to the fourth quarter of the prior year.
27
fomc
1,978
Would you tend to cast the conversation in terms of quarterly averages all the way through as compared with when you're reporting in July maybe getting hung up in a lengthy conversation of June?
35
fomc
1,978
Well, it seems to me that it will be in the report. We haven't written the report; and the Chairman will testify and he hasn't testified. But it seems to me that he would talk about how the year has developed thus far and the implications of that for the second half of the year--that is, the second to the fourth quarte...
80
fomc
1,978
But there's an inference, I think, in picking fourth quarter-to-fourth quarter that there is not a shorter period that's really meaningful to talk about. No shorter than a quarter, or about three months.
41
fomc
1,978
[No shorter] than a quarter? Well, I sort of agree with that. That bears on one of our later recommendations.
26
fomc
1,978
What is the will of the Committee--to approve this proposal or to disapprove it? John.
20
fomc
1,978
Mr. Chairman, there is another aspect of this that I would like to spend a minute on. Personally, I'm in favor of Chuck's view that a more meaningful way of measuring the change is from fourth quarter-to-fourth quarter rather than year-over-year. But another consideration that would influence how I would come out on th...
501
fomc
1,978
Well, I would like to reserve judgment on that. I don't think it really comes up at this point. And I think actually the 4 percentage point spread we have now is a special one. We've had 2-1/2 point spreads on M1, from 4 to 6-1/2. And if you would look at that out for a year, you are still talking about the same scatte...
177
fomc
1,978
That's a very good point; the cone gets wider as you go up.
15
fomc
1,978
Well, we slip the base every quarter now.
10
fomc
1,978
That's the problem. Where we get the problem now is slipping the base. If we stuck by our original one-year projection and had a 2-1/2 point spread-- Now, we are off the subject, but we may want to create a band rather than a cone. There is a lot to be said for that. But I think that's a separate question.
75
fomc
1,978
I do think this is a separate issue. [MR. COLDWELL(?).] What other recommendations do you have?
26
fomc
1,978
Well, there's recommendation 4, which has a great deal to do with the question of whether we can say that what the Committee has done has some relationship with what the President wants done. And I think [following] your suggestion would make it less likely that we'd consider it consistent.
57
fomc
1,978
And that comes up in recommendation 4?
9
fomc
1,978
I think it does.
5
fomc
1,978
In any case, it comes up in February.
10
fomc
1,978
It comes up every meeting because I don't know that you can bind future FOMCs to having only certain spreads. I think any FOMC can put on any spread they want. New people come on and change their minds.
46
fomc
1,978
Chuck, is your base drift on this question?
10
fomc
1,978
The only base drift I see has to be very publicly reported. It has to be that we have given up our original expectations per se on 1979 and either intend or don't intend to make up for it in 1980. That's the kind of base drift there will be, an annual base drift.
62
fomc
1,978
No base drift in July against our February?
9
fomc
1,978
No, you go back to the fourth quarter-to-fourth quarter. You just change--
18
fomc
1,978
It would be an annual base drift.
8
fomc
1,978
Yes, an annual base drift.
7
fomc
1,978
[Unintelligible.]
6
fomc
1,978
Annually there would be a base drift but during the year I think we'd merely move our targets if we decide to change them. We would reaffirm them or say we've moved them up or down; we'd have to admit we were wrong.
47
fomc
1,978
To put it in slightly different terms, the base drift would become more overt and less covert.
19
fomc
1,978
Yes, being spread out so that you--
9
fomc
1,978
It's one of the few real virtues of Humphrey-Hawkins.
14
fomc
1,978
Just on the narrow point, do you want to go fourth quarter-to-fourth quarter? Can we get that one solved?
25
fomc
1,978
Can we have the happy medium of fourth-to-fourth on the February and July and an average in July also? Or would that be a problem?
30
fomc
1,978
I think that would be a problem. If we shift between February and July [how we define] the year the way you're talking about, I think the [Congressional] committee could very reasonably say that we're trying to obscure what's happening.
48
fomc
1,978
Well, actually, if you have fourth quarter-to-fourth quarter, you've got an implicit [number for] year-over-year. By July you're there, and it seems to me that if we're asked, we should give the calendar year [objective].
50
fomc
1,978
Going, going, gone. What's number 3?
11
fomc
1,978
Recommendation 3 has to do with meeting periods--a rather sensitive subject. There are really two aspects to this recommendation. One is that we feel it's necessary for the Committee to change its February and July meeting dates so that it will meet at a time in February, for example, when the staff has been able to an...
591
fomc
1,978
What is the pleasure of the Committee?
8
fomc
1,978
Mr. Chairman, could I [ask] whether we could consider changing the May meeting to the 30th? You have seven weeks between the May and July meetings and five weeks between the May and April meetings.
43
fomc
1,978
You would rather go to six and six?
9
fomc
1,978
I'd rather go to six and six.
8
fomc
1,978
The only reason we didn't do it was because Memorial Day is a holiday.
15
fomc
1,978
Won't most people observe Memorial Day on the 28th?
13
fomc
1,978
Well, apparently that's not true in every state.
10
fomc
1,978
Some places observe it on the 30th.
10
fomc
1,978
We have Confederate Memorial Day in Virginia.
8
fomc
1,978
I seriously considered that and, as a matter of fact, if it had been my choice alone, I would have moved that date.
27
fomc
1,978
Mr. Chairman, I think the arrangement the committee has suggested would be worthwhile. I would suggest, as we've already heard in today's discussion, that we opt for telephone updates in the January and [June] periods.
43
fomc
1,978
Mr. Chairman, this is a troubling recommendation to me in that, among other things, it is cutting the meeting dates from twelve to ten and lengthening the intervals between meeting dates--particularly as we move into 1979. It's going to be a tough year, as demonstrated by the discussion around this table today, it seem...
193
fomc
1,978
I have a note here from Murray Altmann that one of our difficulties is that the BIS meeting is every second Monday and, therefore, we would have to make it the second Wednesday, or our people who go to BIS meetings can't get back. Even then it's not all that good to bring them back from Switzerland immediately to an Op...
143
fomc
1,978
Have you considered going back to quarterly meetings?
9
fomc
1,978
No, not seriously, although some people may think that moving from twelve meetings to ten is a tendency in that direction.
24
fomc
1,978
The second Wednesday--isn't that a possibility?
10
fomc
1,978
Well, except that it means that Paul or Henry and staff--Scott or Alan--will be very tired.
22
fomc
1,978
The [second] Tuesday doesn't come early enough in February and July, I suspect.
17
fomc
1,978
Yes, I think it does.
7
fomc
1,978
It does in July but we could make an exception.
11
fomc
1,978
Maybe in this particular year, but it wouldn't regularly.
11
fomc
1,978
Well, we've heard sentiments around. How many would accept this schedule for 1979 with or without the Coldwell codicil, which is the telephone meeting?
33
fomc
1,978
Everybody or voting members?
5
fomc
1,978
Everybody. Okay, that looks like it. Is anybody unhappy with that?
15
fomc
1,978
Mr. Chairman, there is just one element of unhappiness about Memorial Day. I don't know if anybody observes Memorial Day on--
26
fomc
1,978
We will refer the Memorial Day issue to the subcommittee; this will get our schedule going for February.
21
fomc
1,978
Yes, although we will have to do it soon, because people like to get their calendars [scheduled].
21
fomc
1,978
May I offer another amendment? The official holiday is on Monday the 28th and the natural holiday is Wednesday the 30th. And then there's the 31st, which is a Thursday. You might think of putting the May meeting on that Thursday, the 31st.
57
fomc
1,978
So you want to cancel the May meeting?
9
fomc
1,978
You'll just not have as good input from me if you have it on that day.
17
fomc
1,978
You'll have a hangover on Memorial Day?
9
fomc
1,978
Not a hangover, but I've got some complications.
11
fomc
1,978
What will you have, a Memorial Day [unintelligible]?
14
fomc
1,978
We don't observe it except in spirit; we don't actually leave the Bank. And there is logic to making these intervals six weeks instead of five and seven. I wouldn't have brought it up if there wasn't.
41
fomc
1,978
Bob, you've lost that one, come on.
10
fomc
1,978
We can go another week more and have it on June 5.
14