Source stringclasses 1
value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
|---|---|---|---|
fomc | 1,977 | Mr. Wallich, please. | 7 |
fomc | 1,977 | I wanted to ask a question about appendix table 3, which shows implied velocity growth rates. Now the growth rates that would eventuate under the various alternatives are pretty high--particularly when you look toward the third and fourth quarter, they are remarkably high for V2, because typically that doesn't fluctuat... | 162 |
fomc | 1,977 | That's right. We are expecting a very rapid growth rate in money in the second quarter. And I think the--actually that 5.3 percent velocity for that quarter is in some sense artificially low--it's around 6--you have to average through the second and third quarter, which still leaves you a high M1 around 6. And we're ex... | 134 |
fomc | 1,977 | In the absence of rising interest rates, allowing for the special factors that are operative now on the demand for M1, did you say how large that trend growth rate would be? | 36 |
fomc | 1,977 | Well, Governor Wallich, in the course of working out the material for this Bluebook, we did not work out an alternative which had no interest rate increase involved. So I really cannot give you an answer which would be anything other than my hunch. And I don't know whether you want that at this point. | 64 |
fomc | 1,977 | Yes, I do. | 5 |
fomc | 1,977 | I can tell you the New York hunch. That's a little over 7 percent. | 18 |
fomc | 1,977 | I was going to put my hunch at around 7, and that would be a lower number, I believe, than would be literally read out of some of the models. | 36 |
fomc | 1,977 | What's the number you're referring to? | 7 |
fomc | 1,977 | 7. | 2 |
fomc | 1,977 | The increase in money supply without an increase in interest rates over this Committee's one-year horizon. | 19 |
fomc | 1,977 | What M1 would be without an increase in interest rates. | 12 |
fomc | 1,977 | Well, that would be a growth velocity of about 4 percent, if M1 grew at 7 percent. | 23 |
fomc | 1,977 | That's correct, and that would mean that we're allowing for some further shift from demand deposits to other transaction balances and for the fact that some of this liquidity might be given up willingly rather than require high interest rates in the atmosphere ahead. | 46 |
fomc | 1,977 | Mr. Chairman, may I follow up? I was also struck by this table, Steve. What kind of historical precedent is there for this kind of a velocity rate at this stage of the cycle? | 40 |
fomc | 1,977 | I believe this is a high velocity rate, but again, as I point out, we're expecting higher interest rates. I don't believe there would be a precedent at this stage of the cycle without rising interest rates. I don't know whether you would even have found that. I don't have those figures at hand. | 61 |
fomc | 1,977 | There is a precedent. In the third year of the expansion beginning in '69, M1 velocity was 6.2. But, of course, that was accompanied by a sharp rise in interest rates. So there is a precedent, but not without major changes in short-term money rates accompanying it. | 61 |
fomc | 1,977 | You know, I think we have to be very cautious in approaching this question on the basis of historical perspective. I think it's fair to ask how did velocity behave in the past in the third year of a business cycle expansion. And that is the question that is being discussed and answered around the table. But I think tha... | 169 |
fomc | 1,977 | This would be higher, though, even for the first year. | 13 |
fomc | 1,977 | No, this would be an average of 6 percent for the year, which is not high for the first year of business cycle expansion on the average. Now, next, one has to take into account the changes in financial technology. I'll tell you how I read this table. I didn't go back to any historical records at all, I didn't have the ... | 175 |
fomc | 1,977 | President Eastburn, it was in an effort to help explain this new table that I did want to point out that the movement in liquidity has been very unusual in this cycle as compared with previous cycles. And that is, people have improved their positions during a period when they ordinarily deteriorate. That doesn't mean t... | 87 |
fomc | 1,977 | Is it not true, as Governor Wallich, I think, already suggested, that V2 may be a little more unusual than the V1 here in terms of a historical perspective? V2 hasn't got the 3 percent secular-- | 47 |
fomc | 1,977 | More unusual if you go back to 1960 and stop there. If you go further back, it's a different picture. | 25 |
fomc | 1,977 | Well, I think one can sort of decompose what's happening to V2 to the extent that it contains M1 or if there is an increase in velocity. Now, if there's disintermediation, one would of course expect an increase in velocity during that period because M2 would be rising at a less than trend rate. | 66 |
fomc | 1,977 | If we're wrong, President Volcker, about the extent of interest rate pressures, then V2 would look more reasonable. If interest rate pressures are less, the V2 number is going to be considerably less, while the M1 velocity would be about the same. | 53 |
fomc | 1,977 | But even then, at this stage of the cycle, that is not an unusual level of velocity for M2. Because in the third year of the cycle beginning in 1960, M2 velocity was 6.2. | 46 |
fomc | 1,977 | That was the beginning [of] disintermediation. | 12 |
fomc | 1,977 | It's higher than what you've projected. | 7 |
fomc | 1,977 | Well, that's very sensitive to disintermediation. | 11 |
fomc | 1,977 | Have we done any studies on V3 which would tend to eliminate the changes in financial technology? It wouldn't totally do so, but it would reduce it. | 31 |
fomc | 1,977 | V2 does to a great extent. | 8 |
fomc | 1,977 | Until you get to V3 you don't have the total effect as well covered as you would. | 19 |
fomc | 1,977 | I don't have that data here. | 7 |
fomc | 1,977 | I have not done any. | 6 |
fomc | 1,977 | It just strikes me that it might tend to give you some indication [of what] effect changes in technology would have on this. | 26 |
fomc | 1,977 | [Unintelligible] a lot of technology in V2, that is, to the extent some of the shifts from demand deposits to savings accounts in banks [unintelligible]. | 38 |
fomc | 1,977 | But it's not all going to banks [unintelligible]. | 13 |
fomc | 1,977 | Some of it's going to thrifts. | 8 |
fomc | 1,977 | Mr. Kimbrel, please. | 8 |
fomc | 1,977 | Mr. Chairman, [unintelligible]. Do you have any information that refunds are likely to be, in timing or amounts, significantly different from the usual this year? | 35 |
fomc | 1,977 | We think that the refunds will be a little bit higher than they were last year ,when they came in strong toward the end of February and March and had a definite effect on M1. But the stronger [rebates] were evident also in '74; we think our seasonals are beginning to pick it up. But we don't expect the refunds to be en... | 106 |
fomc | 1,977 | Yes, Mr. Volcker, please. | 9 |
fomc | 1,977 | Well, I just want to follow up on this question. Apparently our analyst thought that the refunds would have a significant impact in March, anyway. But beyond that, the rebates, which won't come for a couple of months subsequent to that, you obviously must have made some calculations here that affect these numbers. I su... | 95 |
fomc | 1,977 | Well, we did put the March growth rate somewhat higher than the February growth rate partly on this thought of the refunds, but it's not a significant enough difference for me to put any real weight on it. On the rebates, we have in process, and we'll have completed within two or three weeks, a very detailed study of t... | 146 |
fomc | 1,977 | 9 percentage points? | 4 |
fomc | 1,977 | I believe that it's 8 to 9. It's in that order of magnitude. Again I would like to stress that these may not be the numbers that we will be using when the rebates come upon us or when we get a better fix on them, because we have not completed this very detailed study we have under way of the 1975 experience. These numb... | 249 |
fomc | 1,977 | I'm surprised that your average increase in the second quarter was only 8 percent under alternative B. | 19 |
fomc | 1,977 | Well, that's how it works out with this 5 percent for April, 14-1/2 for May, and a 10 percent for June. The average rate of increase for the first quarter is somewhere around 5-1/2 percent. | 52 |
fomc | 1,977 | I have no idea what confidence to attach to any of these things, but apparently the New York people have a much lower estimate of this rebate impact that you're just citing now. I thought they had a little confidence in what they were doing, but if I can do it over again and see whether we-- | 61 |
fomc | 1,977 | Well, I had hoped, President Volcker, that the subject would not come up because I did not feel that the work that we had done was adequate for a very confident estimate. And that's why I'm stressing that these are very first approximations and that we are working on a very detailed paper to try to get whatever you can... | 120 |
fomc | 1,977 | There's only one way to do this. Since you don't know what people will do, and since '75 experience may or may not be repeated--history has a way of springing surprises on all of us--I would submit to this Committee a series of estimates based on varying assumptions. And my advice to the Committee at that time will be ... | 96 |
fomc | 1,977 | We also don't know, Mr. Chairman--and this may cause differences in the assumptions--the exact timing of the payout. We have, I think, here assumed that it begins in late April or early May. Again, you get a different [result depending on whether] payouts [are] being [held or] drawn down in May. It's a highly difficult... | 89 |
fomc | 1,977 | We don't want that. The point I'm trying to stress is, don't give us a single estimate. | 20 |
fomc | 1,977 | No, that's what I was going to say. | 10 |
fomc | 1,977 | --give us a series of estimates. | 8 |
fomc | 1,977 | When we're presenting the months where they will be highly relevant to policy, we will provide a range of estimates for the Committee. | 25 |
fomc | 1,977 | All right any other questions? Let's turn to our discussion of monetary policy, and at the end of that discussion we will consider Governor Partee's memorandum. I find myself in a tranquil mood today. Alternative B--considering the state of the economy, the state of markets--that seems entirely satisfactory to me. I co... | 196 |
fomc | 1,977 | My initial approach to this would be, I think, similar to what you just stated. That, on the basis of what I see now, by which I mean I would include the projections we have of the aggregates during this period, I don't see any basis for making any change in our stance. Let me consider what would happen, or what should... | 503 |
fomc | 1,977 | That's where we are now; 4-5/8 to [4-3/4]. | 20 |
fomc | 1,977 | That's where we are now. I don't really want to change now, but I'd like to give myself a little leeway for changing a bit if in fact the aggregates came in high, and I mean quite high--a couple of percent, anyway. | 50 |
fomc | 1,977 | You know, under our rules, if that should happen, then the Desk would communicate with the Chairman promptly, and he in turn would get in touch with the Committee and take actions that are appropriate. | 40 |
fomc | 1,977 | I think that would be acceptable. All I want to express is, I feel a little asymmetrical about the situation. I'd be a little readier to move up just a bit if things came out that way. I hope they're not going to come out that way. They're moving in the other direction. | 61 |
fomc | 1,977 | Paul, you could move to 5 within this specification. | 12 |
fomc | 1,977 | That's right. | 3 |
fomc | 1,977 | Because if you were toward the top on the aggregates, why, you could move up. If the aggregates were very strong, you could go beyond 5 through the device of [a Committee consultation]. | 40 |
fomc | 1,977 | I don't really want to move above 5, don't misunderstand me. I'm not sure I want to move to 5. I just feel a bit asymmetrical about the desirability of moving if the estimates came in on the high side, and that's the only thought I wanted to express here really. | 60 |
fomc | 1,977 | All right, thank you, Mr. Volcker. Mr. Black now, please. | 18 |
fomc | 1,977 | Mr. Chairman, I'm a tad more hawkish today than you are, but not a great deal. I'm not particularly concerned about M1, and I recognize these uncertainties involving the rebates and refunds and the likelihood that whatever does take place may be reversed. I think we have to be very cautious in reacting to the behavior ... | 437 |
fomc | 1,977 | Thank you, Mr. Black. Mr. Coldwell now, please. | 15 |
fomc | 1,977 | Mr. Chairman, I'm in a basically hold position, which I guess is what you're saying. I think the interest rate structure is generally satisfactory for growth over this near-term period, and monetary aggregates seem to be growing at a reasonably satisfactory pace, given the liquidity in the economy. I wouldn't resist mu... | 219 |
fomc | 1,977 | Thank you, Mr. Coldwell. Mr. Kimbrel now, please. | 17 |
fomc | 1,977 | Mr. Chairman, I think we share the same concern for the delicate uneasiness and all of the reasons you suggest, but I did detect that you referred to the weather-induced distortions that we are experiencing. And I think they, too, are contributing to that uneasiness. I think this caution that's been generated has proba... | 212 |
fomc | 1,977 | Thank you, Mr. Kimbrel. Mr. Partee now, please. | 17 |
fomc | 1,977 | Well, Mr. Chairman, I find myself I guess mostly in agreement with President Volcker. I think the danger right now is that we could have higher-than-expected growth rates in the aggregates, and I think if we do, we ought to move against them fairly promptly because of our feeling that the second quarter is going to hav... | 375 |
fomc | 1,977 | Thank you, Mr. Partee. Mr. Mayo now, please. | 15 |
fomc | 1,977 | I really have no trouble with alternative B, Mr. Chairman. I think you could make a case for keeping the federal funds range just where it is now--4-1/4 to 5--on the grounds that we don't know about the weather and so forth and so on. But I think I would be rather shocked if we took advantage of going even to 4-1/2, mu... | 196 |
fomc | 1,977 | Thank you Mr. Mayo. Mr. Jackson now, please. | 13 |
fomc | 1,977 | I don't see the need to make a big, long speech, Mr. Chairman. I think you ought to just stay at alternative B. | 28 |
fomc | 1,977 | Thank you, Mr. Jackson. Mr. Lilly. | 11 |
fomc | 1,977 | Well, I'm not going to make a big, long speech, either. I'm only going to echo what Chuck said, except that I want to make one point. I think it's going to be easier now to move to 5-1/4 than it will be a month from now, two months from now. It might be prudent now to go to 4-1/4 to 5-1/4, [with] the midpoint of 5/8 go... | 112 |
fomc | 1,977 | Thank you, Mr. Lilly. Mr. Wallich. | 12 |
fomc | 1,977 | Well, I think our concerns once more are more with inflation than with growth now that the pause seems clearly over the dam. We also see some substantive blips ahead in the aggregates due to rebates, refunds, rebounds. As I look at those velocity estimates and the associated interest rate increases, I'm [sufficiently] ... | 160 |
fomc | 1,977 | Thank you, Mr. Wallich. Mr. Eastburn now, please. | 16 |
fomc | 1,977 | I would align myself with those who would stay with alternative B and the specifications noted under that. I would like to have a wider federal funds range, but given the way the Committee's operating, I'm satisfied with what we have, and I do think that there's ample room to move if the aggregates were to come in larg... | 96 |
fomc | 1,977 | Thank you, Mr. Eastburn. Who would like to speak next please? Yes, Mr. Van Nice. | 23 |
fomc | 1,977 | I think I'd align myself with Governor Wallich. I would adopt alternative B--which would happen to give us an average growth rate in M1 for this quarter exactly along the lines of our long range targets--with a slight leaning toward alternative C for the same reasons that he's mentioned. And perhaps a raising of the fe... | 79 |
fomc | 1,977 | Thank you, Mr. Van Nice. Mr. Guffey now. | 15 |
fomc | 1,977 | I think I would also prefer B [and] adopting the suggestion to widen the fed funds rate range to 4-1/4 to 5-1/4. I think I would also like to see us, by the Committee meeting next month, to be at a midpoint of that range, 4-3/4. It's a very slight change, to be sure; we're averaging 4.66 now. I'd like to see us end up ... | 103 |
fomc | 1,977 | Thank you, Mr. Guffey. Mr. Balles now. | 15 |
fomc | 1,977 | I think I would agree with what Governor Wallich has expressed. I am concerned with the constant outlook for the economy that I have, and keeping in mind the sharp upward base drift we had in M2 last year, which was over $11 billion and especially strong in the fourth quarter. [And] a concern Governor Lilly has earlier... | 220 |
fomc | 1,977 | Thank you, Mr. Balles. And who would want to speak now? Mr. Gardner, please. | 22 |
fomc | 1,977 | I have the conviction that we should stay with B as stated here. In addition to all else that's been said, I want to make this comment. I don't think that we can pragmatically lay in some supplies for the future in this instance. The reason I say that is the stimulus program is not yet passed into law. If market rates ... | 156 |
fomc | 1,977 | Thank you, Mr. Gardner. Mr. Winn now, please. | 14 |
fomc | 1,977 | I'd identify myself with those in support of B. I think I would take the insurance step of widening the range, not that I advocate using it, but it's being on record that it's there. | 39 |
fomc | 1,977 | Thank you, Mr. Winn. Yes, Mr. Morris. | 13 |
fomc | 1,977 | Mr. Chairman, I support your position with alternative B. I think that the time to lean against the bulge will be in the third quarter, when we find out how much the bulge was. I think in terms of timing, [it is] more appropriate to do it then than to start to do it now. I agree with Governor Gardner that to take even ... | 84 |
fomc | 1,977 | Thank you, Mr. Morris. Mr. Baughman. | 13 |
fomc | 1,977 | I would think that alternative B would probably serve our needs for the next month, with a monetary directive as the aggregates directive and understanding that, if we go to the top of the aggregates, we would go to the top of the funds range as well. | 51 |
fomc | 1,977 | Mr. Roos, you have the opportunity to pronounce the benediction. | 16 |
fomc | 1,977 | Well, I become a voting member possibly next month, so I'll keep my powder dry, Mr. Chairman. B is fine, though. | 28 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.