Source stringclasses 1
value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
|---|---|---|---|
fomc | 1,978 | And presumably this would permit us to organize a conference call in less than two hours, if we had these dedicated lines? | 24 |
fomc | 1,978 | Yes, I think the leased lines would allow us to organize a conference call much more quickly; we can patch it up on our own board. | 29 |
fomc | 1,978 | There are certain automated features in connection with a cable system that would allow us to do that. | 19 |
fomc | 1,978 | We can use it on off time, too. We will use it for our own calls. | 19 |
fomc | 1,978 | It=s a dedicated network. | 6 |
fomc | 1,978 | We will lease it and we will have it just for ourselves. | 13 |
fomc | 1,978 | Well, that would be a big plus just by itself. | 12 |
fomc | 1,978 | And if Bill=s plan works out, we will end up paying for that [to a large extent] with the reduced cost in the transmission of documents. So with your blessing, we will proceed accordingly. Now we will all have lunch. We=ll see you upstairs as soon as we can. | 60 |
fomc | 1,978 | We will begin today's meeting with Scott Pardee's report.] | 12 |
fomc | 1,978 | [Statement--see Appendix.] | 6 |
fomc | 1,978 | Realized [or] unrealized? | 8 |
fomc | 1,978 | Unrealized is about the same. Our average rate is 2.07; the current market rate is around 2.06-1/2. | 32 |
fomc | 1,978 | Thank you, Scott. I heard a report this morning--maybe I misunderstood it--that there was a sudden drop in the dollar in the Far East. Is that [true]? | 36 |
fomc | 1,978 | Yes. In the Far East, the Japanese came out with some more trade figures that suggested they would have a bigger trade surplus in June--$2.3 billion. But we have a case where--that's why I pointed to interest rates here--the dollar tends to firm up in our hours. The dollar was up just before the meeting. | 69 |
fomc | 1,978 | Thank you very much. Any questions? Henry. | 10 |
fomc | 1,978 | Yes. I just wanted to note that in looking at the cost of the swap in terms of losses that Scott just described, it's worth bearing in mind that we're paying interest at the dollar rate, not at the D-mark rate. I think the staff is working now to figure out how much that difference is and what we might do about it. We ... | 124 |
fomc | 1,978 | Scott, do you have an impression of where the major corporations and others are with regard to their position on payments? Are they running a covered position, doing shorts on this, or are they shifting in their leads and lags positions? | 47 |
fomc | 1,978 | Over the course of last fall and winter, many of the corporations did cover well in advance their needs in currencies that they thought would rise. They were, in effect, short of dollars, and that position built up rather substantially. I think a good bit of that was either run off or covered in March and April. Some g... | 249 |
fomc | 1,978 | I raised the question because I'm hearing noises from some friends of mine involved in the international area. They are increasing their covered positions. | 26 |
fomc | 1,978 | Well, some of them have been [doing that] in recent weeks. But when you tip a table and something starts rolling down, the question is how much suddenly slides off. When the market balance tipped against the dollar, some of it did slide. We know of some covering that took place. That is, the selling of dollars forward ... | 85 |
fomc | 1,978 | We need an action to ratify the transactions since the previous meeting. Is there any dissent from that action? Then we will consider that approved. [Next we have] a recommendation of the Manager with respect to foreign currency operations, Scott? | 48 |
fomc | 1,978 | Yes. It's simply that in August we have coming up for maturity ten individual swap drawings in the amount of $315 million equivalent of German marks. These will all be for second renewal, which is agreeable to the Bundesbank in view of the progress that we've been making. I don't know if we'll be able to pay them off b... | 85 |
fomc | 1,978 | Any questions? May I consider that recommendation approved? Hearing no dissent, it is so approved. Now, while Henry was in Basle, I understand that the Japanese asked the question about activating our swap line. You might mention that to the Committee, Henry. | 52 |
fomc | 1,978 | During the last BIS meeting the Japanese came to me and suggested that we now implement something that . [The Japanese] are interested in having the System intervene in yen for its own account instead of just as an agent. I said we'd have to discuss this here but gave them very little hope, citing the objections that e... | 169 |
fomc | 1,978 | Unless there's a groundswell of desire to [acquire] yen and intervene, I think we'll respond saying that we do not believe conditions are appropriate for this. If there's a groundswell, those of you who want to [do this can] testify before Congress and explain why we did it. | 59 |
fomc | 1,978 | I will not be a groundswell, Mr. Chairman, but I can see the day arising when a gesture in that direction may be entirely appropriate. I'm not sure we're right there. | 37 |
fomc | 1,978 | As a quid pro quo for something? | 8 |
fomc | 1,978 | Maybe. In a small amount. | 7 |
fomc | 1,978 | Well, you either should do it enough to be effective [or not do it]. If you do it in a small amount, the static we'll get from it will be more abuse than we-- | 39 |
fomc | 1,978 | Well, a small amount for the United States. It might be part of a big program by Japan. | 21 |
fomc | 1,978 | Yes. I could visualize it if this were a concession as part of a package. But as you know, the Japanese have not been terribly forthcoming on their summit package and their trade negotiations. | 38 |
fomc | 1,978 | I think the question is--and I don't want to pursue this forever--that the relationship between the appreciating yen and a change in their trade problems is nothing very apparent in any event and could have, and has had, some unfortunate side effects. At some point I think the rate ought to be stabilized. Whether we ca... | 100 |
fomc | 1,978 | I'd have to see some fundamentals change before I jump into this. | 13 |
fomc | 1,978 | Well, Paul's point, I think, is that time may [bring a] change. On the point Henry and I made: In formulating a response, we don't want to make this a "forever close the door" response; it's just in today's conditions. Who knows what will happen in the future? All right, let's move along then to the economic and financ... | 116 |
fomc | 1,978 | I would suggest as a procedure that we take a few minutes for any questions of Jim, Jerry, Ted, or others. Then after that I'd like to do once again a go-around and get the inputs from each of you on your [estimates] for GNP. Chuck. | 57 |
fomc | 1,978 | Jim, there's one thing I wanted to clarify that came up in a seminar we had with the Board last week. Some of the papers were distributed to the members of the Committee. If I understand it correctly--although [you] say your last table is put entirely in terms of M1 growth rates and their effect--the projection period ... | 128 |
fomc | 1,978 | That's correct. There's uncertainty on the part of the staff, for example, on the precise nature of the money demand function. | 25 |
fomc | 1,978 | Sure. | 2 |
fomc | 1,978 | And we believe that the channels through which monetary policy works would be interest rates. So we've stuck with the interest rates at the low end of the ranges in alternative B. | 34 |
fomc | 1,978 | And that's about 8-1/4 percent for the funds rate? | 15 |
fomc | 1,978 | No, it's higher than that. | 7 |
fomc | 1,978 | It's 8-3/4; the 8-1/4 is for the bill rate. | 21 |
fomc | 1,978 | Right. And we believe associated with that would likely be a rate of growth in money of 6-1/4 percent. That assumes, as Steve I guess will be talking about in his presentation, some further downward drift in the money demand function. If that were not to occur, then money growth would be stronger, assuming the same int... | 95 |
fomc | 1,978 | All right. Thank you. | 6 |
fomc | 1,978 | John Balles. | 4 |
fomc | 1,978 | The question I wanted to ask Jim, Mr. Chairman, has to do with the 6-1/4 percent M1 growth postulated here for the forecast period, which is through 1979. I don't know how you feel about it yourself, Jim, but we're so concerned about the undermining of M1 in terms of institutional changes, past and prospective, that we... | 140 |
fomc | 1,978 | We have not made any change. In effect, the 6-1/4 percent is premised now on a scenario in which either the automatic transfers do not go into effect or, if they do, the rate of growth of M1 would be adjusted downward sufficiently to offset that impact. So, again, in terms of interest rates you have the 6-1/4 percent i... | 106 |
fomc | 1,978 | President Balles, for purposes of the projection, I think the point you raise doesn't matter because the projections are based on a 6-1/4 percent rate of growth in M1 abstracting from automatic transfers. If there's automatic transfers, that rate of growth may indeed be lower but if you added back in the shifts that oc... | 164 |
fomc | 1,978 | I hear what you're saying. | 6 |
fomc | 1,978 | You're not too convinced but you hear it. Ernie. | 12 |
fomc | 1,978 | Mr. Chairman, I have a question--in fact two of them--relating primarily to the assumptions. If the tax cut assumed were not to materialize and if we were to operate the same monetary policy--assuming it is cast in terms of monetary aggregates--that we would if there were a tax cut, would you judge that that would chan... | 85 |
fomc | 1,978 | We have done some exercises, and Jerry may remember some of the details better than I do. But I do remember that for 1979 we believe that stripping out the tax cut is worth about 1/2 percentage point, or maybe a shade more, in terms of real growth for the whole year. You get a bigger bang early on but it fades fairly q... | 131 |
fomc | 1,978 | With respect to the energy program, you still view that as essentially having a neutral effect--that whatever funds are picked up will be put back in the economy? | 32 |
fomc | 1,978 | Yes, we do. The Administration's estimate on this crude oil equalization tax (COET) in 1979 is about $4-1/2 billion. It soon will be distributed. Actually, the formulas that have been worked out provide in 1979 a little bit more distribution and inflow, but it would even out over time. The major impact there, I think, ... | 132 |
fomc | 1,978 | Will that come right at the beginning of the year, Jim? | 13 |
fomc | 1,978 | January 1. | 4 |
fomc | 1,978 | Yes, because it's a one-time increase for that year. | 12 |
fomc | 1,978 | Thank you. Larry. | 5 |
fomc | 1,978 | Jim, I'm confused about two remarks that I think you made. One is that assuming a 6-1/4 percent M1 growth rate you anticipated a moderating trend in inflation. It looks to me as though the figures show at least a continuation of 7.2 percent, which is not really moderating. Secondly, in your response to Chuck's question... | 190 |
fomc | 1,978 | No, the difference there is between the funds rate and the bill rate in forecasting. The bill rate tends, through much of the forecast period, to run roughly 1/2 percentage point below the funds rate. | 43 |
fomc | 1,978 | That explains it. | 4 |
fomc | 1,978 | But as interest rates rise, that differential widens. | 11 |
fomc | 1,978 | I got it. | 4 |
fomc | 1,978 | My chart and comments referred to the bill rate but it's consistent in our view with the low [unintelligible] end of the funds rate. With regard to your other question, I may have misspoken--or perhaps you're referring to my comments at the end of my briefing. When I talked about "moderating," it wasn't in terms of the... | 290 |
fomc | 1,978 | Is that a recommendation, Jim, that we cut those things out? | 14 |
fomc | 1,978 | I don't ask this question in an impertinent manner, but do you totally discount the relationship of aggregates growth to prices? Forgetting those exogenous factors, isn't there a relationship between our monetary policy actions--M1 [growth of] 6-1/4 or 7-1/4 and this price level into the future? Isn't that relevant? | 73 |
fomc | 1,978 | Depending on one's preconceptions, I guess the question, frankly, is: How does monetary policy work? The way we go about this, and certainly in terms of my own view, money does matter. But it matters in that it affects markets and it affects interest rates. It alters decisions, so the level of activity is either higher... | 283 |
fomc | 1,978 | Frank Morris had a question. Did he leave? Well then, we'll go to Bob Mayo. | 19 |
fomc | 1,978 | My question has been answered. | 6 |
fomc | 1,978 | Yours has been answered. All right then, we'll go to Philip Jackson. | 16 |
fomc | 1,978 | I think mine has been answered but I'm not positive. Did the President's announcements yesterday about the United States energy policy change any of your energy [assumptions] and the impact on inflationary expectations? | 41 |
fomc | 1,978 | Truthfully, no. | 5 |
fomc | 1,978 | Let's just say we can live with what he promised. Would that change any-- | 16 |
fomc | 1,978 | Well, in my understanding, the key word in that [communique] that was circulated to you was "approximately"--2.5 billion barrels a day by approximately 1985. Now, 2.5 million barrels a day is a current estimate of what the full energy program will give you in terms of savings. Of course, you also have to worry about wh... | 239 |
fomc | 1,978 | Frank, we missed you for a moment, and we're going to pick you up now. | 18 |
fomc | 1,978 | All right, sir. Jim, the problem I have with this whole scenario is that we are projecting moderate growth rates through 1981 under conditions of very severe financial strain without generating a recession, all of which seems to me very improbable. It seems to me that the more probable case would be a recession beginni... | 110 |
fomc | 1,978 | Well, one of the difficulties when you look ahead is that it is often hard to perceive what sources of strength might emerge. It is a traditional problem we have. And perhaps here it is also a case where it is difficult to see the swings that might develop. When you look back in history, we have these wild swings and t... | 179 |
fomc | 1,978 | Gentlemen, I have four names left on the list. I suggest I run through them and then perhaps we will do a go-around, in which case any other comments or questions will be brought up. Bones, do you have a question? | 50 |
fomc | 1,978 | Quickly. Jim, I didn't detect any comment on inventories. But in the Greenbook you [have] pretty conservative [numbers] over this period. Do you feel comfortable with the continuing situation we have with the inventory outlook? | 46 |
fomc | 1,978 | Yes. I would like to share the wealth here, so maybe Jerry can answer that. He has been looking at inventories particularly. | 26 |
fomc | 1,978 | The inventory situation doesn't look like it contains any major significant imbalances. There are some reports of a back-up in inventories of consumer nondurables. But that is the sort of thing that usually can be run off rather quickly and we don't seem to be seeing any progressively larger problems developing. So for... | 81 |
fomc | 1,978 | Roger. | 2 |
fomc | 1,978 | Thank you, Mr. Chairman. My question revolves around your projection for the first quarter of l979 premised upon the tax cut. What are the elements of that tax cut that give a kick early in the year and then die off so quickly? It seems to me that on the [consumer] side at least we won't realize that until we have gone... | 75 |
fomc | 1,978 | I think in the National Income Accounting, though, you get it at an annual rate. You get the full effect. | 24 |
fomc | 1,978 | There is a change in the withholding immediately, isn't there? | 12 |
fomc | 1,978 | That is right but it is annualized. So you get the full impact of that immediately. | 19 |
fomc | 1,978 | But in terms of consumer expenditures, if you follow it into the economy, it is spread over the full year, right? | 25 |
fomc | 1,978 | Yes, and we have most of the impact occurring, frankly, in the first half; there is still some there later on but it fades. In addition, we have assumed some impact [from] the investment tax credit, which might be in the fourth quarter to the first quarter in terms of the shipment and delivery of goods. It is retroacti... | 85 |
fomc | 1,978 | Roger, spending would rise to a higher level. Then it would stay at that higher level and since the GNP [unintelligible] first difference is right in the first part of the year. I think that is the reason. | 48 |
fomc | 1,978 | But that is coupled, for those of us who pay taxes, with social security tax increases, so there is some question of whether you get any kick at all in the first quarter. | 37 |
fomc | 1,978 | Henry. | 2 |
fomc | 1,978 | Jim, you have alternative levels for inflation and unemployment, which if I read this correctly are roughly of a 1-to-1 nature. One percent more inflation saves you 1 percent on unemployment and vice versa. How does that check with the numbers that we frequently hear from Charlie Schultze and Art Okun where a much less... | 126 |
fomc | 1,978 | With regard to the Phillips curve, that is a debated issue that has generated much journal literature and I presume it will continue to do so in the years to come. In the model, obviously, we have an implicit Phillips curve relationship. It is stable. The tradeoff in the model relationship is much more favorable than t... | 294 |
fomc | 1,978 | Thank you. | 3 |
fomc | 1,978 | Phil Coldwell. | 4 |
fomc | 1,978 | Jim, you have made two variable assumptions in this, as I hear you--a 6-1/4 percent rate of growth in M1 and a lower end of the interest rate spectrum. If you were to modify the interest rate assumption, what impact would this have on your model? | 59 |
fomc | 1,978 | If you modify the interest rate, then we would share alternative GNP scenarios. We do have an assumption of the low end of interest rates defined by alternative B. If, for example, one wanted to opt for looking at interest rate levels that are a bit higher, such as at the midpoint, we have enough sets of books around n... | 211 |
fomc | 1,978 | No, that's fine. I was just curious which way things would move in terms of the impact on GNP, prices, and unemployment. You would say, for example, that your l979 figures would give me a rough estimate of what you would expect on real GNP, prices, and unemployment. | 61 |
fomc | 1,978 | Right--perhaps a little bit less impact if you choose mid-alternative B interest rates and look at 5-1/4 percent money. Again, those are rough. | 35 |
fomc | 1,978 | Gentlemen, we have quite an interesting process. We have the Redbook. We have the Greenbook and the Bluebook and we have the presentations and your questions. Then we finally come around to the recent procedure of asking you for your individual judgments of what you see in terms of three critical elements in the next f... | 268 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.