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value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
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fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Second. | 2 |
fomc | 1,980 | Without objection. Now we go to the authority for lending securities. This is more substantive. We've reviewed this at intervals, quite a few intervals. I take it the proposal is to continue it unchanged. If nobody has any problems with that, I would hope we could approve that with equal expedition. | 59 |
fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Second. | 2 |
fomc | 1,980 | Without objection, that's approved. The warehousing of foreign currencies, I think, falls in the same category. If you want to have a discussion of that, I would propose a very short-term approval of [the current procedures] and consider it at a meeting when we have time to discuss it. But if it doesn't need any discus... | 75 |
fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Second. | 2 |
fomc | 1,980 | Without objection, it's approved for another year. The only remaining item we have is the date of the next meeting, Tuesday, April 22. | 29 |
fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Approved without objection. Thank you. | 8 |
fomc | 1,980 | Can we come to order, ladies and gentlemen? I am delighted to say that our Vice Chairman, Mr. Solomon, who was duly elected in absentia last time, is with us today. Welcome to your first meeting. I am sure you'll find out about the wonderful ways of the Open Market Committee very quickly. First, we have the minutes. | 70 |
fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Without objection, we will approve the minutes. Mr. Pardee. | 14 |
fomc | 1,980 | [Statement--see Appendix.] | 6 |
fomc | 1,980 | Comments or questions? | 4 |
fomc | 1,980 | Scott, how would you rate the relative importance of the declining rates and prospective declines in rates vis-a-vis the Iranian situation, so far as weakness in the dollar is concerned? | 35 |
fomc | 1,980 | Much more important are the interest rates. On the Iranian situation, when you talk to different people they'll give you different interpretations even on the same day. For the moment interest rates are the dominant factor in peoples' minds in the exchange markets. | 48 |
fomc | 1,980 | But if we kept the aggregates under control successfully for the next several months, would interest rates and prospective interest rate movements mean as much as they do now? | 31 |
fomc | 1,980 | In a couple of months the exchange traders might be thinking about something else. The [focus of their] attention tends to shift from time to time. Currently, given that there is a feeling that we're in a period where interest rates are topping off and people are uncertain as to how far interest rates are likely to go ... | 147 |
fomc | 1,980 | Has that mix changed any? I know that has been true for a long time. | 17 |
fomc | 1,980 | It depends in some banks on whether they have monetarist economists that they have to listen to; but they work with interest rates. And I'm afraid, with this 1.4 [number released] this morning, that we're hearing again from the market that there has not been any improvement on inflation in terms of the CPI. | 66 |
fomc | 1,980 | Following up President Black's question: The market knows the projections are for falling interest rates. These forecasts are also derivable from Treasury bill futures and the like. Do you think the exchange rate discounts these future declines in interest rates so that if they materialized there would be no further ex... | 60 |
fomc | 1,980 | It's a question of [timing]. We surveyed corporate treasurers yesterday to find out what they were thinking at this moment. Several of them related practically the same view: They expect that sooner or later interest rates may decline in the United States--that it's necessary--as we move into a recession. But as I indi... | 168 |
fomc | 1,980 | The consumer price index isn't going to come down for three months. | 13 |
fomc | 1,980 | What are the price indexes doing in other countries? | 10 |
fomc | 1,980 | They are beginning to level off, I'm afraid, certainly in Germany and Switzerland where they are running around 6 percent or 5 percent. Wholesale and producer price indexes are still very high in many of these countries. Japan is still reporting very high increases, but they are beginning to level off, too, as the oil ... | 86 |
fomc | 1,980 | What are German interest rates doing? Are they off their peak or not? | 15 |
fomc | 1,980 | Today they're off a little. The Euro-mark is about 9-1/4 percent and the three-month rate on interbank [loans] is down below 10 percent. | 37 |
fomc | 1,980 | What were they at the peak? | 7 |
fomc | 1,980 | Euro-marks as against Eurodollars were around 17 percent as against 9 percent. We're still at a differential of about 7 to 8 percentage points, depending on which measure we use. | 41 |
fomc | 1,980 | That's close to the peak. | 6 |
fomc | 1,980 | It's not appreciably off the peak. | 8 |
fomc | 1,980 | Well, it was at about 10 percentage points before, close to 10-1/2. | 21 |
fomc | 1,980 | Any other questions? | 4 |
fomc | 1,980 | A question, I guess to Ted Truman: In the summary of the Greenbook, the staff concluded with a paragraph about the outlook for the dollar, which as nearly as I can remember has said about the same thing for the last year or two, whereas the dollar has had some ups and downs. I wonder if this is because that is the best... | 79 |
fomc | 1,980 | Well, the dollar has had some ups and downs. However, for the last 18 months, or in fact since shortly after the November 1st program, the dollar on average has not moved. It has moved in a band of about 5 percentage points on average and our projections have been more or less within that same range. As far as your sec... | 313 |
fomc | 1,980 | Mr. Winn. | 4 |
fomc | 1,980 | We hear a good bit of publicity about domestic credit problems. The Chrysler story is in the paper this morning, and so forth. I hear no mention of international credit problems, and that seems to me to be an exposure that gets overlooked in the assessment. I don't know whether you have any feel for this or not. | 64 |
fomc | 1,980 | There are several people who might be able to answer that. In terms of the non-oil-[producing] less developed countries, there is a lot of discussion about that. | 36 |
fomc | 1,980 | That's the sort of thing I mean. It seems to me that's a problem that is ahead of us in spades. | 24 |
fomc | 1,980 | I think both the Board staff and our staff, as well as other staffs, are looking at this very carefully. We're moving into another period where the whole discussion of recycling is very important. Since the 1974-75 period scared so many people, perhaps we're in a little better shape coming into this one. People talk ab... | 110 |
fomc | 1,980 | Well, as we said in the presentation to the Committee in February, it's not clear how the international credit problems will impact on the dollar per se or on the U.S. economy. There is a feedback between the policies that are adopted by other major oil importing countries in this framework [in terms of their effect] o... | 146 |
fomc | 1,980 | The difficulty of the non-oil-[producing] LDCs in borrowing sufficiently and the need to draw down reserves will probably lessen the pressures for diversification out of the dollar. On the other hand, the probable failure of the substitution account negotiations may increase diversification pressures by the OPEC countr... | 231 |
fomc | 1,980 | What is the capital conversion situation now? Have the Germans stopped that? | 14 |
fomc | 1,980 | But we're not getting any now. | 7 |
fomc | 1,980 | On the capital conversion? No, they haven't had many issues lately. | 14 |
fomc | 1,980 | If they had them, presumably we would get them. But they just haven't had any. | 18 |
fomc | 1,980 | Right. | 2 |
fomc | 1,980 | I wonder whether it wouldn't be desirable to have some downward pressure on the dollar, with the economy moving into what could prove to be a pretty sizable recession. Wouldn't it be nice to have a little better export market? | 44 |
fomc | 1,980 | There are considerable lags. You're talking about effects in 1981-1982, not now. | 21 |
fomc | 1,980 | Yes, I know. But we don't know how long the recession is going to last either. | 19 |
fomc | 1,980 | On the other hand though, Chuck, until the inflation rate does begin to go down, the reasonably stable dollar is one of the few things we have going for us. It is considered an anti-inflationary influence to a modest degree, so I think we would be well advised to try to make sure, as best we can, that any decline in th... | 80 |
fomc | 1,980 | Well, I agree with that. | 7 |
fomc | 1,980 | Not to resist a decline, but [to ensure] that it is a gradual one. | 18 |
fomc | 1,980 | The trouble with declines in the dollar is that they get a certain momentum of their own. | 18 |
fomc | 1,980 | And, of course, the thing that would bring the inflation rate down the quickest in the short run would be lower interest rates because the CPI is being affected so greatly [by] mortgage costs and other indirect costs of higher interest rates. | 47 |
fomc | 1,980 | These all strike me as rather unorthodox ways of coping with our problems: Depreciate the dollar, bring down interest rates, and fight inflation. Now, I don't think you really meant this seriously, but it sounded a little ominous because there are people who do believe that. | 58 |
fomc | 1,980 | One more question. The freezing of the Iranian assets [added] one aspect to the diversification desires of other nations. Did the suggestion in the latest of the President's proposals that we seize them--not only freeze them but seize them--to meet various expenditures, etc. have any further repercussions? | 59 |
fomc | 1,980 | Well, the whole package, as I indicated, is that as long as the United States is exposed, whatever we do to act unilaterally in Iran is seen as bad for the dollar. The indications out of the European ministries meeting today are that perhaps they will help us, and that is giving the dollar a little lift. But, as for in... | 93 |
fomc | 1,980 | We need a motion to ratify the transactions. | 10 |
fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Without objection. As for recommendations with respect to operations, we took an action last month regarding these forwards with the Bundesbank, which we would turn over to the Treasury. I would hope that we could still do that. I take it that the Bundesbank is taking the position that if we have any swaps outstanding,... | 111 |
fomc | 1,980 | Gets to realize its losses! | 6 |
fomc | 1,980 | Mr. Sternlight. | 5 |
fomc | 1,980 | [Statement--see Appendix.] | 6 |
fomc | 1,980 | Mr. Balles. | 5 |
fomc | 1,980 | Peter, I'm very curious about what happened to the expected April bulge. As you know, the Committee was concerned that it not be allowed to happen. I'm not quite sure we were looking forward to a negative bulge. Do you have any insights into what was going on? | 56 |
fomc | 1,980 | Well, the aggregates have proved once again their lack of short-run predictability. We thought we had a sure thing going with April because [the money supply in] April has bulged every year for the past 4 or 5 years it seems. | 51 |
fomc | 1,980 | You can't believe in anything anymore, can you? | 10 |
fomc | 1,980 | I'm not sure that I can pinpoint any special factor. I don't know if Steve wants to add anything. In New York our faces are even redder than those of the Board staff because we were anticipating an even greater bulge. | 46 |
fomc | 1,980 | Well, the growth rate [of Ml] in April of 1976 was 6.6 percent; in 1977, 9.2 percent; in 1978, 12.6 percent; and in 1979, 14.7 percent. My memory is that there is genuine weakness in the unadjusted deposits. If one compared year over year and applied the seasonal factor of 1976--that is abstracting from all the adjustm... | 226 |
fomc | 1,980 | I heard Chuck mutter under his breath that it might have something to do with the weakness in the economy. | 22 |
fomc | 1,980 | Do we know what happened in April 1975? | 11 |
fomc | 1,980 | Yes, [M1 growth in] April 1975 was -3 percent. In fact, one has to go back to 1970, 1971, and 1972 to have high Aprils again. They were between 7 and 8 percent in those three successive years. | 60 |
fomc | 1,980 | I see. | 3 |
fomc | 1,980 | In April 1975 we were just coming out of recession. | 13 |
fomc | 1,980 | Well, in terms of money demand-- | 8 |
fomc | 1,980 | I might say, Governor Partee, that the -3 percent of April 1975 was followed by a May of 13 percent and a June of 16 percent. | 35 |
fomc | 1,980 | So much for that! | 5 |
fomc | 1,980 | Mr. Baughman. | 6 |
fomc | 1,980 | Well, I was going to raise a question as to whether the seasonal adjustment might not have been a factor. But I would also like to ask Peter whether he could comment on his confidence or lack thereof in the projected rather strong money growth for May and June shown in the report which I believe was put out in New York... | 65 |
fomc | 1,980 | Well, I don't really want to claim any paternity for the money projections that are made in New York! I look at all those projections with great skepticism. In projecting a fairly strong May and June, basically I think our people felt that they did not see a reason at this point to change the quarterly growth patterns,... | 117 |
fomc | 1,980 | But they use, do they not, something approximating the Greenbook outlook for the general economy? | 20 |
fomc | 1,980 | They would be basing it on their own [forecast], but that is not a very different outlook in this case. | 24 |
fomc | 1,980 | Mr. Black. | 4 |
fomc | 1,980 | Mr. Chairman, I can think of one small technical factor that might have affected [money growth]: The delay in mailing out the [tax] refunds might have made the money hit balances a couple of days later, but probably no more than that. If we figured it correctly, that would account for maybe $800 million or something li... | 183 |
fomc | 1,980 | The delay does have an effect. Our estimate is slightly higher than yours through the week of the 16th. We have some slightly counterbalancing upward effect in the week of the 23rd; we assume it will be washed out by the 30th and probably have a trivial effect on the month on average. But we are assuming that M1 for th... | 130 |
fomc | 1,980 | What about people paying off debts? | 7 |
fomc | 1,980 | Well, they can pay off debts out of almost any asset. They may be paying them off out of cash or they may be letting other assets run down. I just have no way of knowing until we get the quarterly flow of funds. | 48 |
fomc | 1,980 | But, Steve, didn't you say yesterday that there is no evidence that people are moving into other types of money? | 23 |
fomc | 1,980 | Yes, so far. I'll have some of that in my own briefing. But that's right; thus far we don't have evidence of money moving into higher order Ms. We don't have data yet for Treasury bills or complete data on debt. | 47 |
fomc | 1,980 | I gather that there wasn't anything more than the availability of more data that led to these downward revisions. | 20 |
fomc | 1,980 | In the money supply? | 5 |
fomc | 1,980 | Yes, for the week of the 16th. | 11 |
fomc | 1,980 | No, we don't have anything more than we normally have as the weeks go by. | 17 |
fomc | 1,980 | Mr. Roos. | 5 |
fomc | 1,980 | Mr. Chairman, before we feel that our inability to forecast monthly behavior of the aggregates reflects some sort of weakness in what we're doing, I think we should keep in mind the fact that even the most ardent monetarists have never believed it is possible to control money or to avoid fluctuations on a month-to-mont... | 138 |
fomc | 1,980 | If there are no other comments, we have to ratify the transactions. | 15 |
fomc | 1,980 | So moved. | 3 |
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