Regional President Speech

SK DRAFT Cl) SILAS KEEHN REMARKS YOUNGER HEN'S GROUP UNION LEAGUE CLUB JANUARY 23. 1985 I. INTRODUCTION -- GRACIOUS INTRODUCTION A. THOUGHT I WOULD TALK ABOUT THE CHALLENGES AND CHANGES CURRENTLY FACING THE FEDERAL RESERVE SYSTEM 1. THE IMPLICATIONS OF THESE CHANGES ON THE MARKETS, ON FINANCIAL INSTITUTIONS AND ON THE PUBLIC AT LARGE 2. GIVEN THE NATURE OF OUR ACTIVITIES, THE FEDERAL RESERVE PLAYS A VERY KEY ROLE IN THE AFFAIRS OF OUR COUNTRY -- PERHAPS NOT FULLY UNDERSTOOD II. LET ME START BY QUICKLY REVIEWING THE STRUCTURE OF THE FEDERAL RESERVE SYSTEM -- AND THERE IS A REASON FOR MY TAKING TIME TO DO THIS Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 2 A. DESCRIPTION OF THE FEDERAL RESERVE SYSTEM, BANKS, BRANCHES, GEOGRAPHIC, ET Al 1. EACH BANK A GOVERNMENT CORPORATION -- SEPARATE A. STOCK OWNED BY MEMBER BANKS B. BOARD OF DIRECTORS -- 9 C. 3 CLASSES -- THE ELECTIVE PROCESS 2. BOARD OF GOVERNORS -- 7: 14 YEAR STAGGERED TERMS A. APPOINTMENT/CONFIRMATION PROCESS B. CHAIRMAN/VICE CHAIRMAN 3. INTERRELATIONSHIP BETWEEN BOARD OF GOVERNORS AND THE BANKS A. RESERVE BANK BOARDS OF DIRECTORS HAVE AN IMPORTANT GOVERNANCE RESPONSIBILITY (1) YET SOMEWHAT DIFFERENT THAN A REGULAR COMMERCIAL BANK DIRECTOR B. OPERATIONAL AND PROCEDURAL CONTROLS Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 3 B. THE IMPORTANCE IN HIGHLIGHTING THIS STRUCTURE 1. CHECKS AND BALANCES A. EVERYTHING WE DO SUBJECTED TO CHECK AND BALANCE B. AN EXCEPTIONALLY IMPORTANT, YET LITTLE UNDERSTOOD, FEATURE FOR SUCCESSFUL OPERATION OF A CENTRAL BANK -- MONETARY POLICY 2. IN TURN, THIS HIGHLIGHTS THE INDEPENDENCE OF THE FEDERAL RESERVE SYSTEM -- YOU ARE GOING TO HEAR THIS THEME THROUGHOUT THIS MORNING A. CREATED BY CONGRESS -- CAN BE CONTROLLED BY CONGRESS B. THROUGH FREQUENT TESTIMONY, VARIOUS REPRESENTATIVES OF THE FED, MOST NOTABLY THE CHAIRMAN, REPORT TO CONGRESS Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl} 1/17/85 PAGE 4 (1) SENATE, FEBRUARY 20 C. YET WE DO ENJOY A SIGNIFICANT DEGREE OF INDEPENDENCE IN THE CONDUCT OF OUR AFFAIRS (1) WHICH, FRANKLY, WE JEALOUSLY GUARD 3. AS CONGRESS MOVES FORWARD IN THEIR NEW SESSION, THIS ISSUE WILL ASSUME A HIGHER VISIBILITY A. ALREADY THERE ARE INDICATIONS THAT THEY WILL RE-FOCUS ON THIS ISSUE B. IF THERE WERE TO BE A SIGNIFICANT SLOWDOWN IN THE RATE OF ECONOMIC ACTIVITY, THIS WOULD ONLY HIGHLIGHT THE MATTER C. THERE IS THE RISK THAT WE COULD GET CAUGHT IN THE MIDDLE AS THE FISCAL Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 5 DEFICIT/TAX REVENUE IMBROGLIO INTENSIFIES -- AND IT SURELY WILL III. THE FUNCTIONS OF THE FEDERAL RESERVE BANKS A. THREE DISTINCT AREAS OF ACTIVITY 1. FOR COMPLETELY SEPARATE AND DIFFERENT REASONS 2. ALL GOING THROUGH A PERIOD OF SIGNIFICANT CHANGE 3. YET EACH OF THESE ACTIVITIES, AT LEAST TANGENTIALLY, RELATES TO MONETARY POLICY THE PRIMARY RESPONSIBILITY AND ONE OF ABSOLUTELY OVERRIDING IMPORTANCE IV. AS A START, OUR BASIC OPERATIONS, THE PROCESSING OF VARIOUS WHOLESALE ACTIVITIES FOR FINANCIAL INSTITUTIONS, OF MAJOR MAGNITUDE A. LET ME USE A CURRENT ISSUE, NAMELY ELECTRONIC FUND TRANSFERS, AS AN EXAMPLE OF HOW ULTIMATELY THIS RELATES TO MONETARY POLICY Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 6 1. YOU MAY BE AWARE THAT WE ARE INCREASINGLY FOCUSING ON THE EFT AREA AS ONE BEARING SPECIAL CONCERN 2. BECAUSE WE OPERATE THE FEDWIRE, WHICH IS DIRECTLY COMPETITIVE WITH SEVERAL PRIVATE SECTOR NETWORKS A. THERE IS THE IMPRESSION THAT WE ARE ATTEMPTING TO EXPAND OUR PRESENCE -- OUR MARKET POSITION -- TURF 3. RATHER, WE HAVE BEEN INCREASINGLY CONCERNED ABOUT THE RISKS INHERENT IN THE WHOLE WIRE AREA A. ENORMOUS VOLUMES -- WEEKLY DOLLAR VOLUME ON 4 SYSTEMS EXCEEDS ONE TRILLION DOLLARS B. A BREAKDOWN IN THE WIRE AREA, ON ONE OF THE NETWORKS, COULD HAVE A DESTABILIZING EFFECT ON THE FINANCIAL MARKETS Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 7 4. IF A MAJOR INSTITUTION FAILED OR WAS IN SOME WAY UNABLE TO SETTLE ITS POSITION DURING THE DAY OR AT THE END OF THE DAY, A DOMINO EFFECT COULD OCCUR 5. OUR ONLY RECOURSE WOULD BE TO LIQUEFY THE FINANCIAL SYSTEM A. THIS WOULD HAVE OBVIOUS MONETARY POLICY IMPLICATIONS 6. THIS SUBJECT ONE THAT IS UNDER CURRENT REVIEW. OUR HOPE IS THAT A SURVEILLANCE STRUCTURE CAN BE PUT IN PLACE THAT WILL DEAL WITH OUR CONCERNS A. YET NOT IMPEDE THE EFFICIENCY OF THE SYSTEM, WHICH I AM SURE IS VITALLY IMPORTANT TO ALL OF YOU B. OUR INVOLVEMENT IN OPERATIONS, NOT ONLY THE WIRE Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl} 1/17/85 PAGE 8 AREA BUT CHECK COLLECTION AS WELL, PROVIDES THE FED WITH AN IMPORTANT ENTREE IN THE PAYMENTS MECHANISM 1. PAYMENTS MECHANISM -- ARCANE PIPELINE OBVIOUSLY AN AREA OF CONCERN TO US 2. SOME FINANCIAL INSTITUTIONS QUESTION THE EXTENT OF OUR ROLE IN THE OPERATING AREA 3. BUT THE POTENTIAL RISKS OF HAVING THE FED CEASE ITS PRESENCE ARE VERY SIGNIFICANT A. EVEN OUR HARSHEST CRITICS WOULD NOT WANT THAT B. THE MONETARY POLICY IMPLICATIONS BECOME TERRIBLY IMPORTANT SECOND AREA V. SUPERVISION AND REGULATION A. REGULATION -- THE DEVELOPMENT OF RULES BY WHICH FINANCIAL INSTITUTIONS ARE GOVERNED AND CONTROLLED Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 9 B. SUPERVISION -- THE ENFORCEMENT OF THESE REGULATIONS AS THEY RELATE TO THE INSTITUTIONS FOR WHICH WE HAVE PRIMARY RESPONSIBILITY C. THE FINANCIAL SERVICE INDUSTRY IS GOING THROUGH A PERIOD OF SIGNIFICANT STRUCTURAL CHANGE 1. THE MARKETPLACE CHANGES ARE OCCURRING FAR MORE RAPIDLY THAN THE REGULATORY/LEGISLATIVE CHANGES A. WITHIN PAST FEW WEEKS -- IMPORTANT DEVELOPMENTS -- WHOLE AREA LITERALLY SEETHING 2. ONLY JUST BEGINNING TO SEE THE IMPACT OF THIS 3. THE EXAMPLES OF OTHER INDUSTRIES THAT HAVE GONE THROUGH DEREGULATION ARE INSTRUCTIVE 4. BANKING WILL BE NO DIFFERENT D. THE FINANCIAL SERVICES INDUSTRY IS FACING AN OVERCAPACITY PROBLEM Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 10 1. REGULATION HAS PROVIDED SUPPORT FOR A GREATER NUMBER OF INSTITUTIONS THAN NATURAL MARKET FORCES COULD HAVE PERMITTED 2. DEREGULATION Will EXPOSE All INSTITUTIONS TO MARKET CONDITIONS THAT THEY HAVE NEVER EXPERIENCED BEFORE A. A CONSOLIDATION AND REDUCTION IN THE NUMBER OF PARTICIPANTS Will BE A NATURAL RESULT E. CLEARLY, THESE DEVELOPMENTS Will TOUCH ON THE SAFETY AND SOUNDNESS OF THE FINANCIAL SYSTEM 1. FAILURES THAT DESTABILIZE FINANCIAL INSTITUTIONS COULD HAVE AN IMPACT ON THE MARKETS AND FINANCIAL CONDITIONS A. MONETARY POLICY, THE LOGICAL RESPONSE TO THIS PROBLEM Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 11 8. ONCE AGAIN, AN ISSUE THAT SEEMS VERY MECHANICAL IN NATURE HAS MONETARY POLICY IMPLICATIONS THIRD AREA VI. ECONOMIC RESEARCH AND MONETARY POLICY -- WE ARE IN ONE OF THOSE HAPPY PERIODS WHEN MOST THINGS FROM BOTH ECONOMIC AND MONETARY POLICY PERSPECTIVES ARE IN REASONABLY GOOD ORDER, YET THIS AREA ALSO IS FACING IMPORTANT CHALLENGES A. LOOKING BACK ON 1984, OPERATION OF MONETARY POLICY PRETTY SUCCESSFUL 1. M-1: JUST UNDER MIDPOINT AT END OF YEAR -- IN RANGE WHOLE YEAR 2. M-2: IN UPPER PART OF RANGE BUT WITHIN RANGE WHOLE YEAR Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 12 3. BROADER AGGREGATE M-3 -- OVER UPPER PART OF RANGE All YEAR B. SIGNIFICANT ACCOMPLISHMENTS SINCE THE BASIC OPERATING CHANGE IN OCTOBER 1979 1. INFLATION RESULTS -- BRIEF PERIOD A. BUT CURRENT LEVEL STILL TOO HIGH 2. ADMITTEDLY ACCOMPLISHED AT ENORMOUS COSTS PARTICULARLY IN THE MIDDLEWEST A. MANY OF YOU SENSITIVE TO THIS C. OUR CURRENT CHALLENGE TO MAINTAIN THE LONGER RANGE OBJECTIVE -- RETURNING THE ECONOMY TO AN ENVIRONMENT OF PRICE STABILITY 1. YET WE Will NEED TO BE FLEXIBLE IN OUR APPROACH TO THIS EXCEPTIONALLY IMPORTANT OBJECTIVE Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl} 1/17/85 PAGE 13 D. THERE ARE A NUMBER OF RISKS TO THE CURRENT ECONOMIC EXPANSION 1. I WON'T ENUMERATE THEM ALL BUT BY FAR THE LARGEST RISK IS THE CONTINUING AND GROWING FISCAL DEFICIT 2. THE PUBLICITY PARTICULARLY DURING THESE INITIAL WEEKS OF JANUARY -- l ALMOST DARE NOT MENTION IT -- IT HAS BECOME BORING 3. DESPITE THE RHETORIC, IT'S A PROBLEM THAT WE HAVEN'T TAKEN VERY SERIOUSLY A. PERHAPS WITH GOOD REASON, AFTER ALL, THINGS SEEM TO BE GOING REASONABLY WELL (1) EXPANSION, UNEMPLOYMENT, INFLATION (2) SO WHY REACT B. WE TEND TO BE CRISIS ORIENTED -- WE DON'T ACT UNTIL THE CRISIS ARISES Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 14 4. BUT TO A VERY LARGE EXTENT, THE MAGNITUDE OF THE DOMESTIC FISCAL DEFICIT IS BEING MASKED BY THE TRADE DEFICIT A. WE ALL UNDERSTAND THAT THE FOREIGN MARKETS ARE FINANCING A SIGNIFICANT PART OF OUR DOMESTIC DEFICIT B. WITH THE PASSAGE OF TIME, WE HAVE BECOME VERY COMPLACENT ABOUT A SET OF CIRCUM- STANCES THAT SHOULD MAKE US EXTREMELY UNCOMFORTABLE C. OUR RELATIVELY HIGH INTEREST RATES, LOW LEVELS OF INFLATION, GOOD ECONOMIC CONDITIONS AND SOLID POLITICAL SYSTEM HAVE MADE THE DOLLAR CONTINUINGLY ATTRACTIVE D. BUT MARKETS CAN CHANGE VERY, VERY RAPIDLY Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl} 1/17/85 PAGE 15 (1) IF INTERNATIONAL SENTIMENT CHANGES AND MARKETS TURN AROUND (2) PARTICULARLY IF THE CHANGE IS ABRUPT AND IN SIGNIFICANT AMOUNTS {3} IT COULD HAVE A VERY SERIOUS EFFECT ON OUR MARKETS {4} INTEREST RATES MIGHT WELL GO UP (5) AND THEN THE FISCAL DEFICIT ISSUE WOULD TAKE ON AN ENTIRELY DIFFERENT DIMENSION E. TO CHANGE THE FOCUS A BIT FISCAL DEFICITS RESULT IN DEBT -- GROWINGLY WORRIED ABOUT THE COMPOUND INTEREST SYNDROME 1. THE CURRENT LEVEL OF FEDERAL DEBT IS OVER $1.5 TRILLION -- AT THE CURRENT RATE, THE Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 16 LEVEL IS RISING BY SOME $4.5 BILLION PER WEEK 2. OR SOME $900 MILLION EACH AND EVERY WORKING DAY F. IT TOOK OUR COUNTRY 200 YEARS, ALMOST OUR WHOLE HISTORY, TO REACH A DEBT LEVEL OF $500 BILLION 1. JUST 5 MORE YEARS TO DOUBLT THAT TO $1 TRILLION 2. AND NOT YET MIDWAY IN THE CURRENT DECADE, WE HAVE ADDED MORE THAN $500 BILLION MORE TO REACH THE $1.5 TRILLION LEVEL 3. THE RATE OF ESCALATION HAS BECOME PRETTY FRIGHTENING A. FAIR QUESTION -- HAS THE PROBLEM GROWN TO THE POINT THAT IT HAS GOTTEN BEYOND OUR CONTROL G. IMPORTANTLY, THE INTEREST COST OF SUPPORTING THIS BURGEONING DEBT HAS OMINOUS IMPLICATIONS Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 17 1. MANY STUDIES AND FORECASTS WOULD SUGGEST THAT AN INCREASING PERCENTAGE OF OUR GNP WILL BE COMMITTED TO THE PAYMENT OF INTEREST ON THE DEBT 2. BY THE END OF THE CENTURY, NOT LIGHT YEARS AWAY, SOME 10% OF OUR GNP WILL BE UTILIZED IN THE PAYMENT OF INTEREST -- UP FROM A CURRENT LEVEL OF ABOUT 3% OF GNP 3. THIS IS BECOMING AN UNCONTROLLABLE PART OF THE BUDGET THE INTEREST BILL HAS TO BE PAID Vil. THE IMPLICATIONS OF ALL THIS FOR MONETARY POLICY ARE CLEAR A. IT WILL BE EXCEPTIONALLY DIFFICULT TO DEVELOP A VIABLE MONETARY POLICY IN SUCH AN ADVERSE FISCAL ENVIRONMENT 1. THERE MUST BE SOME REASONABLE BALANCE IN ORDER Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 18 TO MAINTAIN OUR CURRENT POLICY OF CONTROLLING INFLATION AND RETURNING THE ECONOMY TO CONDITIONS OF PRICE STABILITY 2. FISCAL/MONETARY POLICY SIMPLY CANNOT BE MOVING IN DIAMETRICALLY OPPOSED DIRECTIONS B. BUT LET ME TRY AND PLACE THIS DEBT ISSUE ON A MORE POSITIVE NOTE. A MUCH LONGER RANGE VIEW OF THE FISCAL PROBLEM CAN BE QUITE ENCOURAGING 1. LOOKING AT THE ENTIRE HISTORY OF OUR COUNTRY A. THE FISCAL DEFICIT/DEBT PROBLEM IS ONE THAT WE HAVE FREQUENTLY FACED, AND IN EACH AND EVERY INSTANCE WE HAVE SOLVED IT 2. OUR DEFICITS HAVE BEEN EVENT ORIENTED -- CAUSED BY A WAR, PANIC, AN ECONOMIC RECESSION -- OR SOME SIMILAR ADVERSE EVENT, WHICH OBVIOUSLY SHOULD BE DEALT WITH Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 19 BY INCURRING A DEFICIT 3. BUT AFTER THE EVENT, WE HAVE RUN BUDGETARY SURPLUSES AND WE HAVE AT LEAST REDUCED OR IN SOME INSTANCES EVEN ELIMINATED THE DEBT 4. THIS RECORD HOLDS FOR THE REVOLUTIONARY WAR, THE WAR OF 1812, THE CIVIL WAR, WWI, AND ALL OTHER EVENTS WE EXPERIENCED RIGHT UP THROUGH THE IMMEDIATE POST WWII PERIOD 5. IN THE 14 YEARS FROM 1947 THROUGH 1960, THERE WERE 7 FISCAL DEFICITS AND 7 SURPLUSES 6. BUT SINCE 1960, THERE HAS BEEN ONLY ONE SURPLUS YEAR, 1969, AND THAT WAS ONLY $3 BILLION A. WHEN HISTORIANS LOOK BACK AT THE RECORD, IT MAY BE THAT 1960 WILL HAVE BEEN THE TURNING POINT IN ALL OF THIS Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 20 7. WE SEEM TO HAVE ENTERED A NEW PHASE IN OUR HISTORY A. OUR DEFICITS ARE NO LONGER EVENT ORIENTED B. WE ARE NOW WILLING TO EXPERIENCE DEFICITS AND INCREASE THE DEBT TO SUPPORT OUR NORMAL ACTIVITIES C. THIS INVOLVES A MAJOR PHILOSOPHICAL CHANGE IN THE MANAGEMENT OF OUR AFFAIRS C. BUT MY REASON FOR GOING THROUGH ALL OF THIS IS TO SIMPLY SUGGEST THAT THE CURRENT SITUATION CANNOT CONTINUE (AND, OBVIOUSLY, I AM EXPRESSING A PERSONAL VIEW) 1. IT IS SIMPLY AN UNSUSTAINABLE SET OF CIRCUMSTANCES AND IN THAT SENSE THE SITUATION CAN ONLY IMPROVE -- IT CAN'T GET WORSE Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 21 2. AT SOME POINT WE WILL RUN OUT OF MANEUVERING ROOM 3. ENTIRELY POSSIBLE THAT THAT TIME MAY BE APPROACHING 4. IF THE CURRENT RATE OF EXPANSION WERE TO SLOW CONSIDERABLY -- AND WE DO NOT FORECAST THAT -- WE HAVE A POSITIVE OUTLOOK FOR 1985 A. BUT THERE ARE THOSE, SOME WITHIN THE FED, THAT SUGGEST THAT WE SHOULD BE MORE EXPANSIONARY WITH MONETARY POLICY {l) THAT WE MUST PUSH ECONOMIC GROWTH UP TO THE 5% PER ANNUM RANGE (2) TO PROVIDE EMPLOYMENT OPPORTUNITIES FOR THE GROWING WORK FORCE {3) AND A GREATER TAX REVENUE BASE TO DEAL WITH THE DEFICIT ISSUE Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT (1) 1/17/85 PAGE 22 5. ATTENTION MAY WELL FOCUS ON THE FED AND ON MONETARY POLICY A. WE COULD BECOME A LIGHTNING ROD AND END UP IN THE MIDDLE 6. THE INDEPENDENCE ISSUE THAT I MENTIONED AT THE OUTSET COULD BECOME A MATTER OF CONSIDERABLE DEBATE VIII. TO CONCLUDE A. LONG WAY OF SAYING THAT THE FED IS CURRENTLY DEALING WITH SOME EXCITING CHALLENGES 1. THERE REALLY IS A LOT GOING ON, MUCH OF WHICH MAY BE REASONABLY OBSCURE TO THE PUBLIC AT LARGE B. TRIED TO HIGHLIGHT THIS MORNING 1. DEFICIT IS MAJOR ISSUE FACING US 2. THAT IT WILL BECOME INCREASINGLY DIFFICULT TO Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 23 DEVELOP A VIABLE MONETARY POLICY IN SUCH AN ADVERSE FISCAL ENVIRONMENT 3. INCREASINGLY THERE IS THE POSSIBILITY THAT CONGRESS Will ATTEMPT TO EXERT GREATER CONTROL OVER THE FED A. IF THIS WERE TO OCCUR. IF WE WERE TO LOSE SOME OF OUR INDEPENDENCE, B. THERE WOULD BE SIGNIFICANT PRESSURE TO REFLATE THE ECONOMY (1) MONETIZE THE DEBT C. THIS WOULD BE VERY DIFFICULT TO RESIST D. THE FREE WORLD IS LOADED WITH EXAMPLES OF THIS THAT SHOULD BE INSTRUCTIVE TO US C. BUT I AM OPTIMISTIC THAT SOMEHOW WE WILL ULTIMATELY FACE THIS DEFICIT PROBLEM AND RESOLVE IT Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SK DRAFT Cl) 1/17/85 PAGE 24 1. THOUGH THE NEAR TERM PROSPECTS SEEM PRETTY DISCOURAGING 2. IMPORTANTLY. THE LONGER RANGE RECORD SUPPORTS THIS OPTIMISM D. ON THAT POSITIVE NOTE LET ME CONCLUDE 1. THANK YOU VERY MUCH * * * * * * Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis

Silas Keehn (1985, January 22). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19850123_silas_keehn

@misc{wtfs_regional_speeche_19850123_silas_keehn,
  author = {Silas Keehn},
  title = {Regional President Speech},
  year = {1985},
  month = {Jan},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19850123_silas_keehn},
  note = {Retrieved via When the Fed Speaks corpus}
}