FOMC Minutes

Meeting of Federal Open Market Committee November 17, 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, November 17, 1970, at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Burns, Chairman Hayes, Vice Chairman Brimmer Daane Francis Heflin Hickman Maisel Mitchell Robertson Sherrill Swan Messrs. Galusha, Mayo, and Morris, Alternate Members of the Federal Open Market Committee Messrs. Eastburn, Clay, and Coldwell, Presidents of the Federal Reserve Banks of Philadelphia, Kansas City, and Dallas, respectively Mr. Holland, Secretary Mr. Broida, Deputy Secretary Messrs. Kenyon and Molony, Assistant Secretaries Mr. Hackley, General Counsel Mr. Partee, Economist Messrs. Axilrod, Craven, Gramley, Hersey, Hocter, Parthemos, Reynolds, and Solomon, Associate Economists Mr. Holmes, Manager, System Open Market Account Mr. Coombs, Special Manager, System Open Market Account -2- 11/17/70 Messrs. Bernard and Leonard, Assistant Secretaries, Office of the Secretary, Board of Governors Mr. Coyne, Special Assistant 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 Miss Orr, Secretary, Office of the Secretary, Board of Governors Mr. Fossum, First Vice President, Federal Reserve Bank of Atlanta Messrs. Link, Taylor, and Tow, Senior Vice Presidents, Federal Reserve Banks of New York, Atlanta, and Kansas City, respectively Messrs. Scheld and Andersen, Vice Presidents, Federal Reserve Banks of Chicago and St. Louis, respectively Messrs. Gustus and Kareken, Economic Advisers, Federal Reserve Banks of Philadelphia and Minneapolis, respectively Mr. Friedman, Consultant, Federal Reserve Bank of Boston Mr. Cooper, Manager, Securities and Acceptance Departments, 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 October 20, 1970, were approved. The memorandum of discussion for the meeting of the Federal Open Market Committee held on October 20, 1970, was accepted. 11/17/70 By unanimous vote, the System open market transactions in foreign currencies during the period October 20 through November 16, 1970, were approved, ratified, and confirmed. By unanimous vote, renewal for further periods of one year of the following swap arrangements, having the indicated amounts and maturity dates, was approved: Foreign bank Amount of arrangement (millions of dollars) Austrian National Bank National Bank of Denmark Bank of England Bank of Japan Bank of Mexico 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 Maturity of latest authorized renewal 200 200 2,000 1,000 130 200 250 600 December December December December December December December December 2, 2, 2, 2, 2, 2, 2, 2, 1970 1970 1970 1970 1970 1970 1970 1970 600 December 2, 1970 1,000 December 2, 1970 By unanimous vote, the open market transactions in Govern ment securities, agency obligations, and bankers' acceptances during the period October 20 through November 16, 1970, were approved, ratified, and confirmed. With Mr. Maisel dissenting, the Federal Reserve Bank of New York was authorized and directed, until otherwise directed by 11/17/70 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 output of goods and services is changing little in the current quarter and that unemployment has increased. Part but not all of the weakness in over all activity is attributable to the strike in the auto mobile industry which apparently is now coming to an end. Wage rates generally are continuing to rise at a rapid pace, but gains in productivity appear to be slow ing the increase in unit labor costs. Recent movements in major price measures have been erratic but the general pace of advance in these measures has tended to slow. Most interest rates declined considerably in the past few weeks, and Federal Reserve discount rates were reduced by one-quarter of a percentage point in the week of November 9. Demands for funds in capital mar kets have continued heavy, but business loan demands The money supply changed little at banks have weakened. on average in October for the second consecutive month; bank credit also was about unchanged, following a slow The balance of payments ing of growth in September. deficit on the liquidity basis was at a lower rate in the third quarter and in October than the very high second-quarter rate, but the deficit on the official settlements basis remained high as banks repaid Euro In light of the foregoing devel dollar liabilities. of the Federal Open Market is the policy opments, it Committee to foster financial conditions conducive to orderly reduction in the rate of inflation, while encouraging the resumption of sustainable economic growth and the attainment of reasonable equilibrium in the country's balance of payments. To implement this policy, the Committee seeks to promote some easing of conditions in credit markets and moderate growth in money and attendant bank credit expansion over the months ahead, with allowance for temporary shifts in money and credit demands related to the auto strike. System open market operations until the next meeting of the Committee shall he conducted with a view to maintaining bank reserves and money market conditions consistent with those objectives. 11/17/70 -5 It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, December 15, at 9:30 a.m. The meeting adjourned. Secretary 1970,

Federal Reserve (1970, November 16). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19701117

@misc{wtfs_fomc_minutes_19701117,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1970},
  month = {Nov},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19701117},
  note = {Retrieved via When the Fed Speaks corpus}
}