FOMC Minutes

Meeting of Federal Open Market Committee April 18, 1972 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, April 18, 1972, at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Burns, Chairman Hayes, Vice Chairman Brimmer Coldwell Daane Eastburn MacLaury Maisel Mitchell Robertson Sheehan Winn Messrs. Francis, Heflin, Mayo, and Swan, Alternate Members of the Federal Open Market Committee Messrs. Morris, Kimbrel, and Clay, Presidents of the Federal Reserve Banks of Boston, Atlanta, and Kansas City, respectively Mr. Holland, Secretary Mr. Broida, Deputy Secretary Messrs. Altmann and Bernard, Assistant Secretaries Mr. Hackley, General Counsel Mr. Hexter, Assistant General Counsel Mr. Partee, Senior Economist Mr. Axilrod, Economist (Domestic Finance) Mr. Solomon, Economist (International Finance) Messrs. Boehne, Bryant, Gramley, Green, Hersey, and Hocter, Associate Economists Mr. Holmes, Manager, System Open Market Account 4/18/72 Mr. Melnicoff, Deputy Executive Director, Board of Governors Mr. O'Connell, General Counsel, Board of Governors Mr. Chase, Associate Director, Division of Research and Statistics, Board of Governors Messrs. Keir, Pierce, Wernick, and Williams, Advisers, Division of Research and Statistics, Board of Governors Mr. Pizer, Associate Adviser, Division of International Finance, Board of Governors Mr. Wendel, Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Miss Eaton, Open Market Secretariat Assistant, Office of the Secretary, Board of Governors Mrs. Rehanek, Secretary, Office of the Secretary, Board of Governors Messrs. Parthemos, Taylor, Scheld, Andersen, Tow, and Craven, Senior Vice Presidents, Federal Reserve Banks of Richmond, Atlanta, Chicago, St. Louis, Kansas City, and San Francisco, respectively Messrs. Bodner and Nelson, Vice Presidents, Federal Reserve Banks of New York and Minneapolis, respectively Mr. Garvy, Economic Adviser, Federal Reserve Bank of New York Mr. Sandberg, Manager, Securities and Acceptance Departments, Federal Reserve Bank of New York Mrs. Greenwald, Economist, Federal Reserve Bank of Boston By unanimous vote, the minutes of actions taken at the meeting of the Federal Open Market Committee held on February 15, 1972, were approved. The memorandum of discussion for the meeting of the Federal Open Market Committee on February 15, 1972, was accepted. By unanimous vote, the System open market transactions in foreign currencies during the period March 21 through April 17, 1972, were approved, ratified, and confirmed. 4/18/72 By unanimous vote, renewal for further periods of three months of the eight System drawings on the National Bank of Belgium maturing in the period May 4-25, 1972, was approved. By unanimous vote, renewal for further periods of three months of the three System drawings on the Swiss National Bank maturing in the period May 10-18, 1972, was approved. By unanimous vote, renewal for further periods of three months of the three System drawings on the German Federal Bank maturing on May 30, 1972, was approved. It was agreed that a subcommittee, consisting of the Chairman and Vice Chairman of the Committee and the Vice Chairman of the Board of Governors, or designated alternates, should be authorized to act on behalf of the Committee with respect to terms of settlement of the outstanding System drawings on the German Federal Bank. By unanimous vote, the Federal Reserve Bank of New York was authorized, for a period up to one week from the date of this action, to employ the procedures for establishing rates on repurchase agree ments that were in effect prior to the amendment on April 17, 1972, of paragraph 1(c) of the continuing authority directive with respect to domestic open market operations. By unanimous vote, the open market transactions in Government securities, agency obligations, and bankers' acceptances during the period March 21 through April 17, 1972, were approved, ratified, and confirmed. 4/18/72 By unanimous vote, the Federal Reserve Bank of New York was authorized and directed, until otherwise directed by the Com mittee, 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 grew in the first quarter at about the stepped-up rate attained in the fourth quarter of 1971. Most measures of business activity have shown strength recently and demands for labor have improved further, but the unemployment rate remains high. The rise in wholesale prices slowed in March as some farm and food products declined sharply, but the rise in prices of indus trial commodities remained substantial. Wage rates also rose substantially in March and over the first quarter as a whole. The dollar has strengthened somewhat in exchange markets in recent weeks, and the over-all U.S. balance of payments deficit on the official settlements basis has been small. In January and February merchandise imports continued to be considerably in excess of exports. The narrowly defined money stock expanded rapidly in February and March, bringing the annual rate of growth over the past 6 months to about 5-1/4 per cent. Inflows of consumer-type time and savings deposits to banks have been strong thus far this year, although they moderated as the first quarter progressed; inflows to nonbank thrift institutions remained very large. Mainly reflecting swings in U.S. Government deposits, a modest increase in the bank credit proxy in February was followed by a large increase in March. Market interest rates generally have continued to rise 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 sustainable real economic growth and increased employment, abatement of inflationary pressures, and attainment of reasonable equilibrium in the country's balance of payments. To implement this policy, while taking account of capital market developments and the forthcoming Treasury financing, the Committee seeks to achieve bank reserve and money market conditions that will support somewhat more moderate growth in monetary aggregates over the months ahead. -5 4/18/72 It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, May 23, 1972, at 9:30 a.m. The meeting adjourned. Secretary

Federal Reserve (1972, April 17). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19720418

@misc{wtfs_fomc_minutes_19720418,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1972},
  month = {Apr},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19720418},
  note = {Retrieved via When the Fed Speaks corpus}
}