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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 | Thank you very much. | 5 |
fomc | 1,980 | We have several First Vice Presidents with us today because of the absence--for various reasons--of some of the Presidents, and we welcome you. I don't think we have anything else of that order of business, Mr. Altmann. We need to approve the minutes then. | 55 |
fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Did I hear a second? Without objection the minutes are approved. | 13 |
fomc | 1,980 | That's the same problem I have in the Board meetings! | 11 |
fomc | 1,980 | Mr. Pardee. | 5 |
fomc | 1,980 | [Statement--see Appendix.] | 6 |
fomc | 1,980 | Mr. Chairman, I think it's worth emphasizing one point, which is that the reluctance of the Bundesbank to intervene directly in support of the dollar on as large a scale in the last few days--which means depressing the D-mark--is [related to] the fact that they are at the bottom of the EMS. So there is this contradicti... | 103 |
fomc | 1,980 | They also seem to take the attitude that if we are going to allow the funds rate to move sharply in response to reserve-based techniques, they logically should let the dollar rate respond more. I don't think we should accept that argument. One could argue just the other way: That precisely because it is necessary for u... | 102 |
fomc | 1,980 | In November of 1978 we put together a $28 billion emergency package. Is that still in existence? | 22 |
fomc | 1,980 | No, we didn't have $28 billion, Nancy. We would have had $30 billion, but that included $10 billion of Carter notes. Of the $10 billion of Carter notes, we actually ended up selling--I don't remember the exact figure. | 51 |
fomc | 1,980 | About $6.5 billion. VICE CHAIRMAN SOLOMON(?). We still have [our holdings of] Swiss francs pretty much intact; but Treasury balances of Deutschemarks, where the pressure is, are [nearly] depleted. They have ended up, in a sense, more in a hole than we are. If you compare our swap drawing with their using up the balance... | 102 |
fomc | 1,980 | When are those first Carter bonds due? | 8 |
fomc | 1,980 | Not until September of next year. | 7 |
fomc | 1,980 | That's a little more than a year away. | 9 |
fomc | 1,980 | Well, we must have most of the $20 billion. | 12 |
fomc | 1,980 | How much did we have and how much do we have left? | 13 |
fomc | 1,980 | We have about $2 billion left. | 8 |
fomc | 1,980 | Yes. | 2 |
fomc | 1,980 | That $30 billion was theoretical in the first place. | 11 |
fomc | 1,980 | What did we actually have out of the $30 billion? | 12 |
fomc | 1,980 | Treasury balances are $2+ billion in marks, not including their swap balances, and $1.2 billion in Swiss francs. | 27 |
fomc | 1,980 | What do we have left in the swaps now? | 10 |
fomc | 1,980 | In the swaps? They've only used about $1 billion, so we have about $6 billion left. | 21 |
fomc | 1,980 | One billion out of how much that we have in Germany? | 12 |
fomc | 1,980 | We've used $1.1 billion. | 8 |
fomc | 1,980 | And what's the limit with Germany now, $6 billion? | 12 |
fomc | 1,980 | Six billion. | 3 |
fomc | 1,980 | No, it's $9 billion. | 7 |
fomc | 1,980 | The swap line is $6 billion. | 8 |
fomc | 1,980 | It's $6 billion, and the Treasury has $1 billion. | 13 |
fomc | 1,980 | The Treasury considers itself short right now under the Carter notes by over $3-1/2 billion, [so] we are in a hole. | 30 |
fomc | 1,980 | I don't think I got an answer to my question. | 11 |
fomc | 1,980 | The answer to your question is that we can get more resources at some stage if the Treasury wants to go back and negotiate a new Carter note. | 29 |
fomc | 1,980 | All right, but that doesn't tell me how much-- | 11 |
fomc | 1,980 | The man who negotiated the last Carter notes is sitting next to you. He's not at the Treasury now. | 21 |
fomc | 1,980 | How much did we actually draw in November of [1978]? | 13 |
fomc | 1,980 | Governor Teeters, of the $30 billion, we have $20 billion worth of resources [in] notes [and] currencies now available. And there's a net plus, in some sense, in the unused portion of the $10 billion Carter notes, which in round numbers is $4 billion. That's the answer, I think, to the question you asked. | 73 |
fomc | 1,980 | Okay, thank you. | 5 |
fomc | 1,980 | How much of the Carter notes come due a year from September? | 13 |
fomc | 1,980 | A year from September only one comes due and there's another one [due] in December. I think the total amount is about $1.5 billion. | 31 |
fomc | 1,980 | Yes, but then they start coming due about every 6 months for about 2 more years, Fred, because I originally put them out with 3- and 4-year maturities. Then we had scheduled them at 3-1/2, 4-1/2 and 2-1/2 and 3-1/2. So a whole series is coming due. The question of availability depends on how we look at our debt. Lookin... | 201 |
fomc | 1,980 | Even if we are able to repay, which I hope we will be, we won't really be getting out of debt. We'd be substituting dollar debt for D-mark debt, which is an advantage. But that's really the best way to look [at it] until our current account improves. | 58 |
fomc | 1,980 | Our current account, of course, looks relatively good compared to other countries' current accounts. In round numbers, the deficits are $12 to $15 billion in Germany, $15 billion or more in Japan, and $5 billion in France. There's a small deficit in the United Kingdom, despite their oil, whereas our projections are for... | 130 |
fomc | 1,980 | What about recession? | 4 |
fomc | 1,980 | I think a major question is whether or when we can expect some interest rate declines in the rest of the world. [Foreign officials] are a little ambivalent about it. They're in the same position we are. They want to maintain this psychological posture of getting on top of inflation and not appearing to yield to it. And... | 143 |
fomc | 1,980 | But [I'd point out] one thing. I assume the members of this group are aware that there is one quasi-phony component in our current account calculation. We are figuring in for 1980 $40 billion of services income from abroad. In practice, we are only going to get about half of that because we are counting as services inc... | 132 |
fomc | 1,980 | Is this unique to us? | 6 |
fomc | 1,980 | Yes. | 2 |
fomc | 1,980 | Other countries don't do it? | 6 |
fomc | 1,980 | No, the other countries don't do it. | 9 |
fomc | 1,980 | No, they don't do it. | 7 |
fomc | 1,980 | We changed a few years ago, presumably to get on the same basis as other countries. But we have so much more foreign investment. It's much bigger for us than for anybody else. | 37 |
fomc | 1,980 | I think President Solomon overstated the figures somewhat. If you correct for both sides, as both the inflows and the outflows are counted on that basis, the difference is about $15 billion. | 40 |
fomc | 1,980 | It's $15 billion, not $20 billion this year? | 12 |
fomc | 1,980 | Yes. Last year, in fact, the adjustment on the reinvested earnings was $14.5 billion or something like that. | 27 |
fomc | 1,980 | When we look at gold market developments and some of these flows, I wonder if we're not being a little oblivious to the fact that it's not all economic considerations that are causing them, with the Saudi situation now surfacing. In terms of the news, it's a potential Iran. We hear rumblings out of places like Nigeria ... | 110 |
fomc | 1,980 | I think that's right. Common wisdom in the market, however, is that the [noneconomic factors] on balance probably have helped us a little so far. There is some political instability in Europe particularly, but not with so much [unintelligible]. | 52 |
fomc | 1,980 | On the other hand, with our freezing of the Iranian [assets], if you were a Saudi trying to maneuver would [the United States] be where you'd want to put [funds]? I don't know. | 42 |
fomc | 1,980 | There is some indication that SAMA is now making direct investments in this country in bits and pieces of $50 to $100 million. We first heard about it from the Texas bankers. It began 5 to 6 months ago and seems to be continuing. | 52 |
fomc | 1,980 | We've had some substantial increases in SAMA purchases of Treasury obligations. But I don't think we are getting the same percentage of their investable surplus. | 29 |
fomc | 1,980 | No, the real difference this year is these other countries with current account deficits. Even the Swiss, the Germans, and the Japanese have advertised the availability of their government securities to the Saudis in particular, which they never did before; and they are selling them. The French also are selling a fair ... | 120 |
fomc | 1,980 | In a sense, every country with a good currency can expect some inflow--in fact, a very large inflow in the aggregate --from these sources. The Germans, the Swiss, the French, and the Japanese probably all benefit from this to an extent that they don't seem to want to admit. So they've generated concern about their defi... | 93 |
fomc | 1,980 | Is it considered a political no-no to sell gold in the current environment? | 15 |
fomc | 1,980 | Oh, I don't think so, necessarily. I don't think it's a political problem in the sense that you may be suggesting. It's a question of whether it's very useful or desirable at this stage. [If we sold gold], we'd have to do it alone; I think that's pretty clear. It isn't anything that's ruled out a priori, but it's a pra... | 79 |
fomc | 1,980 | Well, it's between selling assets and borrowing money. That seems to me the significant difference. | 18 |
fomc | 1,980 | The psychology, Ernie, is that [selling gold] seems to be much more effective if it's a component of an overall package of forceful measures than if it is done by itself. In the present climate it would look like a major act of weakness. And that might spur some additional dollar selling unless we did it on an enormous... | 163 |
fomc | 1,980 | I should say, in connection with the political problem, that I don't think there are any great political constraints so far as the thinking in the Administration is concerned. There are politicians who would make a noise that would reflect upon the credibility of the action. If we sell some gold and then immediately ge... | 104 |
fomc | 1,980 | There would be some grass roots opposition to it. I can report that, but I don't have any impression-- | 22 |
fomc | 1,980 | Perhaps I spoke a little misleadingly because that kind of opposition, I think, does reflect on the credibility of the action. It raises questions about whether it could be sustained and what the [total] amount would be and whether it's really an accepted technique or not, even though in some sense I think it's not a p... | 110 |
fomc | 1,980 | So moved. | 3 |
fomc | 1,980 | Without objection, they are ratified. Do you have any recommendations, Mr. Pardee? | 19 |
fomc | 1,980 | I'd simply note that first maturities of six swap drawings on the Bundesbank in the amount of $190 million will be coming up over the period before the next FOMC [meeting]. I expect to roll those over, renew them, if we do not have a significant reflow in marks that would enable us to repay them. | 67 |
fomc | 1,980 | We presumably will renew those as necessary--if necessary. Hope springs eternal. Mr. Meek. | 20 |
fomc | 1,980 | [Statement--see Appendix.] | 6 |
fomc | 1,980 | Let me interrupt you just a second for a clarification. It may be that I was up too many hours yesterday, but did I read the Bluebook wrong? On the first or second page, where the paths were shown, I thought it said we are marginally above the minimum targeted growth. If I look at the figures, it looks as if we are mar... | 131 |
fomc | 1,980 | It's supposed to be the other way around. Steve gave an actual yesterday, if that still stands. The figures are transposed, aren't they, Steve? | 31 |
fomc | 1,980 | Well, no. The figures actually got changed at the last minute, so the marginally above was correct when it was written. It's wrong with regard to M-1A and M-1B; and M2, of course, is well above. It should read that with regard to M-1A and M-1B we were marginally above; the figures were changed at the last minute and th... | 94 |
fomc | 1,980 | So the path is below what was originally-- | 9 |
fomc | 1,980 | No, the path is above because of M2. | 11 |
fomc | 1,980 | But the footnote seems to be wrong on page 3. I'm just gratified that I read this correctly. I found something the matter with it. | 31 |
fomc | 1,980 | Steve, yesterday you gave figures which indicated that the target had been raised over the period by some $170 million. | 23 |
fomc | 1,980 | Yes, the footnote numbers seem incorrect. I'll get those numbers. The $43,377 million is not the original target but the one we now have; $43,293 million was the original target. Those are simply transposed. | 48 |
fomc | 1,980 | I just wanted to demonstrate that I was wide awake when reading your report! | 15 |
fomc | 1,980 | You are quite right; those figures are transposed. | 11 |
fomc | 1,980 | Now that we have had that little ego trip--! | 11 |
fomc | 1,980 | Mr. Meek. | 5 |
fomc | 1,980 | [Statement continued.] | 4 |
fomc | 1,980 | You were supposed to absorb reserves [to remain on] the path, right? I thought you absorbed less reserves than the path called for. | 28 |
fomc | 1,980 | In fact, yesterday there was less demand for matched transactions than we had planned to make. So we wound up doing less than we expected. And there is quite an abundance of excess reserves to be mopped up today. | 44 |
fomc | 1,980 | Your point is that the mopping of the reserves is justified not just by the weakness in the foreign exchange markets but also by the reserve path. | 29 |
fomc | 1,980 | Indeed. We had considered going in early, but the dollar began to strengthen at about the time we were prepared to go in, so we held off until our normal intervention hour. | 36 |
fomc | 1,980 | Comments or questions? These actions in the last six weeks do not provoke any questions? | 17 |
fomc | 1,980 | I might say, just to make clear that we are all listening carefully, that I keep hearing about market perceptions that we have moved back to a funds rate objective with a very narrow range. Do you hear that? | 43 |
fomc | 1,980 | Yes, I think there has been some feeling in the market to that effect. It is a problem we get into when borrowing at the discount window is at frictional levels because it is somewhat indeterminate whether the funds rate will be in the 8-1/2 to 11 percent range. The result is that when we put in reserves at 9-1/2 perce... | 172 |
fomc | 1,980 | Isn't that market perception contributing perhaps to the weakening of the dollar and an implication that we may be repeating some of the mistakes we have made previously that were inflationary? | 34 |
fomc | 1,980 | Well, there's always concern in the market about the level of interest rates and the general thrust of policy. | 21 |
fomc | 1,980 | In other words the markets are really in doubt as to whether we are determined to carry through with a primary emphasis on controlling reserves? | 26 |
fomc | 1,980 | I wouldn't say that that is in question. | 9 |
fomc | 1,980 | The market is doubting whether we have an objective of fighting inflation and whether we are going to let interest rates decline or push interest rates down long enough so that it will encourage these flows of funds into marks, Swiss francs, and other currencies. | 49 |
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