FOMC Minutes

Meeting of Federal Open Market Committee May 23, 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, May 23, 1972, at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Burns, Chairman Hayes, Vice Chairman Brimmer Coldwell Daane Eastburn MacLaury Mitchell Sheehan Winn Mr. Mayo, Alternate Member 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 Mr, Altmann, Assistant Secretary Mr. Hackley, General Counsel Mr, Partee, Senior Economist Mr. Axilrod, Economist (Domestic Finance) Mr. Solomon, Economist (International Finance) Messrs. Boehne, Bryant, Gramley, Green, Hersey, Hocter, Kareken, and Link, Associate Economists Mr. Holmes, Manager, System Open Market Account Mr. Coombs, Special Manager, System Open Market Account 5/23/72 Mr. Melnicoff, Deputy Executive Director, Board of Governors Mr. Cardon, Assistant to the Board of Governors Mr. Coyne, Special Assistant to the 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. Black, Leonard, and Merritt, First Vice Presidents, Federal Reserve Banks of Richmond, St. Louis, and San Francisco, respectively Messrs. Eisenmenger, Parthemos, Scheld, Andersen, Tow, and Craven, Senior Vice Presidents, Federal Reserve Banks of Boston, Richmond, Chicago, St. Louis, Kansas City, and San Francisco, respectively Messrs. Debs and Brandt, Vice Presidents, Federal Reserve Banks of New York and Atlanta, respectively By unanimous vote, the minutes of actions taken at the meet ings of the Federal Open Market Committee on March 21 and April 17, 1972, were approved. The memoranda of discussion for the meetings of the Federal Open Market Committee on March 21 and April 17, 1972 were accepted. By unanimous vote, the System open market transactions in foreign currencies during the period April 18 through May 22, were approved, ratified, and confirmed. 1972, 5/23/72 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 the repayment of the System's swap debt to the Bank of England. It was agreed that the subcommittee indicated above should be authorized to act on behalf of the Committee with respect to repayments on the System's Swiss franc swap debt. By unanimous vote, the Committee approved the renewal for further periods of six months of the following swap arrangements, having the indicated amounts and maturity dates: Amount of arrangement Foreign bank Bank of France German Federal Bank Bank of Italy Netherlands Bank (millions of dollars equivalent) 1,000 1,000 1,250 300 Maturity date June June June June 28, 15, 30, 30, 1972 1972 1972 1972 By unanimous vote, the open market transactions in Govern ment securities, agency obligations, and bankers' acceptances dur ing the period April 18 through May 22, 1972, 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, 5/23/72 to execute transactions in the System Account in accordance with the following current economic policy directive: The information reviewed at this meeting, including recent data for such measures of business activity as industrial production and employment, suggests that real output of goods and services may be growing at a faster rate in the current quarter than in the two preceding quarters, but the unemployment rate remains high. In April wholesale prices of farm and food products changed little--after having declined in March--but the rise in prices of industrial commodities remained substantial. The consumer price index, which had been stable in March, increased somewhat. Wage rates continued to rise at a substantial pace. The U.S. balance of payments on the official settlements basis has been in small surplus since mid-March, but the payments balance on the net liquidity basis has apparently remained in deficit. In March merchandise imports continued to be considerably in excess of exports. Growth in both the narrowly and broadly defined money stock slowed in April from the rapid rates in February and March, Inflows of savings funds to nonbank thrift institutions also slowed, but they remained at a relatively advanced pace. Reflecting a further increase in U.S. Government deposits and a rise in the outstanding volume of large-denomination CD's, the bank credit proxy continued to expand at a rapid rate. In recent weeks, market interest rates have fluctuated in a narrow range. 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 possible Treasury refund ing, the Committee seeks to achieve bank reserve and money market conditions that will support somewhat slower growth in monetary aggregates over the months ahead. 5/23/72 -5 It was agreed that the next meetings of the Federal Open Market Committee would be held on Monday and Tuesday, June 19-20, 1972. The meeting adjourned. Secretary

Federal Reserve (1972, May 22). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19720523

@misc{wtfs_fomc_minutes_19720523,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1972},
  month = {May},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19720523},
  note = {Retrieved via When the Fed Speaks corpus}
}