FOMC Minutes

Meeting of Federal Open Market Committee May 27, 1969 MINUTES OF ACTIONS A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D. C., on Tuesday, May 27, 1969, at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Hayes, Vice Chairman Bopp Brimmer Clay Coldwell Daane Maisel Mitchell Robertson Scanlon Sherrill Messrs. Francis, Heflin, and Swan, Alternate Members of the Federal Open Market Committee Messrs. Kimbrel and Galusha, Presidents of the Federal Reserve Banks of Atlanta and Minneapolis, respectively Mr. Holland, Secretary Mr. Broida, Deputy Secretary Mr. Molony, Assistant Secretary Mr. Hexter, Assistant General Counsel Mr. Partee, Economist Messrs. Axilrod, Baughman, Eastburn, Gramley, Green, Hersey, Link, Reynolds, Solomon, and Tow, Associate Economists Mr. Holmes, Manager, System Open Market Account Mr. Coombs, Special Manager, System Open Market Account -2- 5/27/69 Mr. Sherman, Consultant, Board of Governors Mr. Cardon, Assistant to the Board of Governors Messrs. Coyne and Nichols, Special Assistants to the Board of Governors Mr. Williams, Adviser, Division of Research and Statistics, Board of Governors Mr. Wernick, Associate Adviser, Division of Research and Statistics, Board of Governors Mr. Keir, Assistant Adviser, Division of Research and Statistics, Board of Governors Mr. Bernard, Special Assistant, Office of the Secretary, Board of Governors Miss Eaton, Open Market Secretariat Assistant, Office of the Secretary, Board of Governors Messrs. Latham and MacDonald, First Vice Presidents of the Federal Reserve Banks of Boston and Cleveland, respectively Messrs. Taylor, Jones, and Craven, Senior Vice Presidents of the Federal Reserve Banks of Atlanta, St. Louis, and San Francisco, respectively Messrs. Eisenmenger, Hocter, and Snellings, Vice Presidents of the Federal Reserve Banks of Boston, Cleveland, and Richmond, respectively Mr. Duprey, Senior Economist, Federal Reserve Bank of Minneapolis Mr. Sandberg, Special Assistant, Securities Department, Federal Reserve Bank of New York By unanimous vote, the minutes of actions taken at the meeting of the Federal Open Market Committee held on April 29, 1969, were approved. The memorandum of discussion for the meeting of the Federal Open Market Committee held on April 29, 1969, was accepted. 5/27/69 -3 By unanimous vote, J. Charles Partee was elected Economist and Lyle E. Gramley,Associate Economist of the Federal Open Market Committee to serve until the first meeting of the Committee after February 28, 1970, with the understanding that in the event of the discontinuance of their official connection with the Board of Governors, they would cease to have any official connection with the Federal Open Market Committee. By unanimous vote, the action of Committee members on May 14, 1969, approving equalization of System swap lines with the Netherlands Bank and the National Bank of Belgium at $300 million each, and the conforming amendments to paragraph 2 of the authorization for System foreign currency operations, effective immediately, was ratified. As a result of these actions, the table contained in paragraph 2 of the authorization for System foreign currency operations was amended, effective May 14, 1969, to read as follows: Foreign bank Austrian National Bank National Bank of Belgium Bank of Canada National Bank of Denmark Bank of England Bank of France German Federal Bank Amount of arrangement (millions of dollars equivalent) 100 300 1,000 100 2,000 1,000 1,000 5/27/69 Foreign bank Amount of arrangement (millions of dollars equivalent) Bank of Italy 1,000 Bank of Japan 1,000 Bank of Mexico Netherlands Bank Bank of Norway Bank of Sweden Swiss National Bank Bank for International Settlements: Dollars against Swiss francs Dollars against authorized European currencies other than Swiss francs 130 300 100 250 600 600 1,000 By unanimous vote, the System open market transactions in foreign currencies during the period April 29 through May 26, 1969, were approved, ratified, and confirmed. By unanimous vote, renewal for further periods of three months, if requested, of the two drawings by the Bank of England maturing in the period June 9-10, 1969, and totaling $150 million, was authorized. By unanimous vote, the open market transactions in Govern ment securities, agency obligations, and bankers' acceptances during the period April 29 through May 26, 1969, were approved, ratified, and confirmed. By unanimous vote, the Federal Reserve Bank of New York was authorized and directed, until otherwise directed by the Committee, to execute transactions in the System Account in accordance with the following current economic policy directive: 5/27/69 The information reviewed at this meeting suggests that expansion in real economic activity is continuing to moderate slightly, but that substantial upward pressures on prices and costs are persisting. Interest rates have risen in recent weeks. Bank credit and the money supply appear to be changing little on average in May after bulging in April. The outstanding volume of large-denomination CD's has continued to decline, and the available evidence suggests only modest recovery in other time and savings deposits at banks and in savings balances at nonbank thrift institutions following the outflows of the first half of April. The U.S. balance of payments on the liquidity basis was in sizable deficit in the first 4 months of 1969 but the balance on the official settlements basis remained in surplus as a result of large inflows of Euro-dollars. However, there were substantial outflows of funds from the United States in the first half of May, during the period of intense speculation on a revaluation of the German mark, and the payments balance was in very large deficit on both bases. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster financial conditions conducive to the reduction of inflationary pressures, with a view to encouraging a more sustainable rate of economic growth and attaining reasonable equilibrium in the country's balance of payments. To implement this policy, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining the prevailing pressure on money and short-term credit markets; provided, however, that operations shall be modified if .bank credit appears to be deviating significantly from current projections. It was agreed that the next meeting of the Committee would be held on Tuesday, June 24, 1969, at 9:30 a.m. The meeting adjourned. Secretary

Federal Reserve (1969, May 26). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19690527

@misc{wtfs_fomc_minutes_19690527,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1969},
  month = {May},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19690527},
  note = {Retrieved via When the Fed Speaks corpus}
}