FOMC Minutes

Meeting of the Federal Open Market Committee March 31, 1992 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, March 31, 1992, at 9:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Ms. Mr. Greenspan, Chairman Corrigan, Vice Chairman Angell Hoenig Jordan Kelley LaWare Lindsey Melzer Mullins Phillips Syron Messrs. Boehne, Keehn, McTeer, and Stern, Alternate Members of the Federal Open Market Committee Messrs. Black, Forrestal, and Parry, Presidents of the Federal Reserve Banks of Richmond, Atlanta, and San Francisco, respectively Mr. Mr. Mr. Mr. Mr. Mr. Mr. Kohn, Secretary and Economist Bernard, Deputy Secretary Coyne, Assistant Secretary Gillum, Assistant Secretary Patrikis, Deputy General Counsel Prell, Economist Truman, Economist Messrs. Balbach, J. Davis, R. Davis, T. Davis, Promisel, Siegman, Simpson, and Stockton, Associate Economists Mr. Sternlight, Manager for Domestic Operations, System Open Market Account Mr. McDonough, Manager for Foreign Operations, System Open Market Account -2 Mr. Ettin, Deputy Director, Division of Research and Statistics, Board of Governors Mr. Slifman, Associate Director, Division of Research and Statistics, Board of Governors Mr. Madigan, Assistant Director, Division of Monetary Affairs, Board of Governors Ms. Low, Open Market Secretariat Assistant, Division of Monetary Affairs, Board of Governors Messrs. Broaddus, Lang, Rosenblum, Scheld, and Ms. Tschinkel, Senior Vice Presidents, Federal Reserve Banks of Richmond, Philadelphia, Dallas, Chicago, and Atlanta, respectively Messrs. Fieleke, Judd, and Miller, Vice Presidents, Federal Reserve Banks of Boston, San Francisco, and Minneapolis, respectively Ms. Krieger, Manager, Open Market Operations, Federal Reserve Bank of New York Secretary's Note: Prior to this meeting, notice had been received that Mr. Jerry L. Jordan, President of the Federal Reserve Bank of Cleveland, had executed his Oath of Office as member of the Federal Open Market Committee for the period March 10, 1992 through December 31, 1992. By unanimous vote, the minutes of actions taken at the meeting of the Federal Open Market Committee held on February 4-5, 1992, were approved. By unanimous vote, System open market transactions in foreign currencies during the period February 5, 1992, through March 30, 1992, were ratified. By unanimous vote, System open market transactions in government securities and federal agency obligations during the period February 5, 1992, through March 30, 1992, were ratified. By unanimous vote, 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 domestic policy directive: The information reviewed at this meeting suggests a strengthening in domestic final spending, although industrial production and overall employment do not appear to have picked up correspondingly. Retail sales registered large gains in January and February, with data on inventories, which are available through January, showing some offsetting decline in that month. Single-family housing starts increased substantially Recent data on orders further in January and February. and shipments of nondefense capital goods indicate an increase in outlays for business equipment, but non -residential construction has remained in a steep decline. The nominal U.S. merchandise trade deficit narrowed slightly in January and was essentially unchanged from its average rate in the fourth quarter. Industrial production rose considerably in February, partly reflecting an upturn in motor vehicle assemblies, but was little changed on balance over the Total nonfarm payroll first two months of the year. employment rebounded in February from a large decline in January. With the labor force growing appreciably in recent months, the civilian unemployment rate has risen to 7.3 percent. Wage and price increases have continued to trend downward. Most interest rates have risen appreciably since In foreign the Committee meeting on February 4-5. exchange markets, the trade-weighted value of the dollar in terms of the other G-10 currencies increased substantially over the intermeeting period. Growth of M2 and M3 accelerated in February, but M2 appears to have leveled off and M3 to have declined in March. Much of the growth in the broader aggregates over recent months has been accounted for by a surge in transactions balances. The Federal Open Market Committee seeks monetary and financial conditions that will foster price sta bility and promote sustainable growth in output. In furtherance of these objectives, the Committee at its meeting in February established ranges for growth of M2 and M3 of 2-1/2 to 6-1/2 percent and 1 to 5 percent, respectively, measured from the fourth quarter of 1991 to the fourth quarter of 1992. The monitoring range for growth of total domestic nonfinancial debt was set at 4-1/2 to 8-1/2 percent for the year. With regard to M3, the Committee anticipated that the ongoing re structuring of depository institutions would continue to depress the growth of this aggregate relative to spending and total credit. The behavior of the monetary aggregates will continue to be evaluated in the light of progress toward price level stability, movements in their velocities, and developments in the economy and financial markets. In the implementation of policy for the immediate future, the Committee seeks to maintain the existing degree of pressure on reserve positions. In the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater reserve restraint might or slightly lesser reserve restraint would be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with growth of M2 and M3 over the period -from March through June at annual rates of about 3-1/2 and 1-1/2 percent, respectively. It was agreed that the next meeting of the Committee would be held on Tuesday, May 19, 1992. The meeting adjourned. Secretary

Federal Reserve (1992, March 30). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19920331

@misc{wtfs_fomc_minutes_19920331,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1992},
  month = {Mar},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19920331},
  note = {Retrieved via When the Fed Speaks corpus}
}