FOMC Minutes

Meeting of Federal Open Market Committee October 16, 1973 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, October 16, 1973, at 9:30 a.m. PRESENT: Burns, Chairman Hayes, Vice Chairman Balles Brimmer Bucher Daane Francis Holland Mayo Mitchell Mr. Morris Mr. Sheehan Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Messrs. Clay, Eastburn, Kimbrel, and Winn, Alternate Members of the Federal Open Market Committee Messrs. Black and Coldwell, Presidents of the Federal Reserve Banks of Richmond and Dallas, respectively Mr. Broida, Secretary Messrs. Altmann and Bernard, Assistant Secretaries Mr. Guy, Deputy General Counsel Mr. Nicoll, Assistant General Counsel Mr. Partee, Senior Economist Mr. Axilrod, Economist (Domestic Finance) Messrs. Andersen, Bryant, Eisenmenger, Reynolds, and Scheld, Associate Economists 10/16/73 Mr. Holmes, Manager, System Open Market Account Mr. Coombs, Special Manager, System Open Market Account Mr. Melnicoff, Deputy Executive Director, Board of Governors Mr. Feldberg, Secretary to the Board of Governors Mr. O'Brien, Special Assistant to the Board of Governors Messrs. Keir, Pierce, Wernick, and Williams, Advisers, Division of Research and Statistics, Board of Governors Mr. Pizer, Adviser, Division of International Finance, Board of Governors Mr. Ettin, Assistant Adviser, Division of Research and Statistics, Board of Governors Mr. Wendel, Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Miss Pruitt, Economist, Office of the Secretary, Board of Governors Mrs. Ferrell, Open Market Secretariat Assistant, Office of the Secretary, Board of Governors Mrs. Peters, Secretary, Office of the Secretary, Board of Governors Mr. Strothman, First Vice President, Federal Reserve Bank of Minneapolis Messrs. Boehne, Doll, and Taylor, Senior Vice Presidents, Federal Reserve Banks of Philadelphia, Kansas City, and Atlanta, respectively Messrs. Hocter, Green, and Sims, Vice Presidents, Federal Reserve Banks of Cleveland, Dallas, and San Francisco, respectively Messrs. Garvy and Kareken, Economic Advisers, Federal Reserve Banks of New York and Minneapolis, respectively Mr. Meek, Monetary Adviser, Federal Reserve Bank of New York Mr. McTeer, Assistant Vice President, Federal Reserve Bank of Richmond 10/16/73 By unanimous vote, the minutes of actions taken at the meeting of the Federal Open Market Committee on September 18, 1973, were approved. The memorandum of discussion for the meeting of the Federal Open Market Committee held on September 18, 1973, was accepted. By unanimous vote, the System open market transactions in foreign currencies during the period September 18 through October 15, 1973, were approved, ratified, and confirmed. By unanimous vote, renewal for further periods of 3 months of System drawings on the National Bank of Belgium, the Swiss National Bank, and the Bank for International Settlements maturing in the period November 2-16, 1973, was authorized. By unanimous vote, the open market transactions in Government securities, agency obligations, and bankers' acceptances during the period September 18 through October 15, 1973, were approved, ratified, and confirmed. It was agreed that the authorization for the lending of Government securities from the System Open Market Account should be retained at this time. 10/16/73 By unanimous vote, the Federal Reserve Bank of New York was authorized and directed, until otherwise directed by the Committee, to execute transactions for the System Account in accordance with the following domestic policy directive: The information reviewed at this meeting suggests that growth in real output of goods and services in the fourth quarter is likely to remain at about the moderate rate indicated for the third quarter. In recent months manufacturing employment has leveled off and total non farm employment has expanded less rapidly than earlier; the unemployment rate has remained at 4.8 per cent. The advance in wage rates has been somewhat faster than earlier. In September wholesale prices of industrial commodities rose appreciably; farm and food prices declined, but by far less than they had risen in August. The U.S. merchan dise trade balance weakened slightly in August. Net foreign purchases of U.S. stocks continued large, however, and the balance of payments on an official settlements basis was in surplus in both August and September. Exchange rates for the dollar against most foreign currencies have changed little since mid-August. The narrowly defined money stock, which had risen sharply during the second quarter, declined in September for the second successive month. The more broadly defined money stock expanded slightly in September as a result of The net inflows at banks of consumer-type time deposits. deposit experience at nonbank thrift institutions improved somewhat in September following a period of sizable out Bank credit--which had been expanding rapidlyflows. increased little as business loan growth slowed markedly, and after mid-September the outstanding volume of large denomination CD's declined substantially. Short-term market interest rates fell sharply from mid-September to early October, partly as a result of a shift in market expectations regarding monetary policy, and rates on long-term market securities declined moderately further. 10/16/73 In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster financial conditions conducive to abatement of infla tionary pressures, a sustainable rate of advance in economic activity, and continued progress toward equilibrium in the country's balance of payments. To implement this policy, while taking account of the forthcoming Treasury financing and of international and domestic financial market developments, the Committee seeks to achieve bank reserve and money market conditions consistent with moderate growth in monetary aggregates over the months ahead. It was agreed that the next meeting of the Committee would be held on November 19-20, 1973, beginning at 4 p.m. on November 19. The meeting adjourned. Secretary

Federal Reserve (1973, October 15). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19731016

@misc{wtfs_fomc_minutes_19731016,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1973},
  month = {Oct},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19731016},
  note = {Retrieved via When the Fed Speaks corpus}
}