FOMC Minutes

Meeting of Federal Open Market Committee February 10, 1970 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, February 10, 1970, at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Burns, Chairman Hayes, Vice Chairman Bopp Brimmer Clay Coldwell Daane Maisel Mitchell Robertson Scanlon Sherrill Messrs. Francis, Hickman, and Swan, Alternate Members of the Federal Open Market Committee Messrs. Morris, Kimbrel, and Galusha, Presidents of the Federal Reserve Banks of Boston, Atlanta, and Minneapolis, respectively Mr. Holland, Secretary Mr. Broida, Deputy Secretary Messrs. Kenyon and Molony, Assistant Secretaries Mr. Hackley, General Counsel Mr. Partee, Economist Messrs. Axilrod, Baughman, Eastburn, Gramley, Green, Hersey, Link, Solomon, and Tow, Associate Economists Mr. Holmes, Manager, System Open Market Account Mr. Coombs, Special Manager, System Open Market Account 2/10/70 Mr. Bernard, Assistant Secretary, Office of the Secretary, Board of Governors Mr. Cardon, Assistant to the Board of Governors Messrs. Coyne and Nichols, Special Assistants to the Board of Governors Messrs. Wernick and Williams, Advisers, Division of Research and Statistics, Board of Governors Mr. Keir, Associate Adviser, Division of Research and Statistics, Board of Governors Mr. Wendel, Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Miss Ormsby, Special Assistant, Office of the Secretary, Board of Governors Miss Eaton, Open Market Secretariat Assistant, Office of the Secretary, Board of Governors Messrs. Hilkert and Black, First Vice Presidents of the Federal Reserve Banks of Philadelphia and Richmond, respectively Messrs. Eisenmenger, Parthemos, Taylor, Jones, and Craven, Senior Vice Presidents of the Federal Reserve Banks of Boston, Richmond, Atlanta, St. Louis, and San Francisco, respectively Mr. Hocter, Vice President, Federal Reserve Bank of Cleveland Mr. Kareken, Economic Adviser, Federal Reserve Bank of Minneapolis Mr. Cooper, Manager, Securities and Acceptance Departments, Federal Reserve Bank of New York By unanimous vote, Arthur F. Burns was elected Chairman of the Federal Open Market Committee to serve until the election of his successor at the first meeting of the Committee after February 28, 1970, with the understanding that in the event of the discontinuance of his official connection with the Board of Governors during that period, he would cease to have any official connection with the Federal Open Market Committee. -3 2/10/70 By unanimous vote, the minutes of actions taken at the meeting of the Federal Open Market Committee held on January 15, 1970, were approved. The memorandum of discussion for the meeting of the Federal Open Market Committee held on January 15, 1970, was accepted. By unanimous vote, the System open market transactions in foreign currencies during the period January 15 through February 9, 1970, were approved, ratified, and confirmed. By unanimous vote, the open market transactions in Govern ment securities, agency obligations, and bankers' acceptances during the period January 15 through February 9, 1970, were approved, ratified, and confirmed. With Messrs. Hayes, Brimmer, and Coldwell dissenting, 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: The information reviewed at this meeting suggests that real economic activity, which leveled off in the fourth quarter of 1969, may be weakening further in early 1970. Prices and costs, however, are continuing to rise at a rapid pace. Long-term market interest rates recently have fluctuated under the competing influences of heavy demands for funds and shifts in investor attitudes regarding the outlook for monetary policy. Bank credit declined in January but the money supply increased substantially on average; both had risen slightly in the fourth quarter. Flows of time and savings funds at banks and nonbank thrift 2/10/70 institutions have remained generally weak since year end, and they apparently have been affected little thus far by the recent increases in maximum rates pay able for such funds. The U.S. foreign trade balance improved somewhat in December, as imports fell off. The over-all balance of payments has been in substan tial deficit in recent weeks. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster financial conditions conducive to the orderly reduction of inflationary pressures, with a view to encouraging sustainable economic growth and attaining reasonable equilibrium in the country's balance of payments. To implement this policy, while taking account of the current Treasury refunding, possible bank regula tory changes and the Committee's desire to see moderate growth in money and bank credit over the months ahead, System open market operations until the next meeting of the Committee shall be conducted with a view to moving gradually toward somewhat less firm conditions in the money market; provided, however, that operations shall be modified promptly to resist any tendency for money and bank credit to deviate significantly from a moderate growth pattern. It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, March 10, 1970, at 9:30 a.m. The meeting adjourned. Secretary

Federal Reserve (1970, February 9). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19700210

@misc{wtfs_fomc_minutes_19700210,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1970},
  month = {Feb},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19700210},
  note = {Retrieved via When the Fed Speaks corpus}
}