FOMC Minutes

Meeting of Federal Open Market Committee

January 14, 1969

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, January 14, 1969, at 9:30 a.m.

PRESENT:

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Martin, Chairman

Brimmer

Daane

Galusha

Hickman

Kimbrel

Maisel

Mitchell

Morris

Robertson

Sherrill

Treiber, Alternate for Mr. Hayes

Messrs. Bopp, Clay, Coldwell, and Scanlon,

Alternate Members of the Federal Open

Market Committee

Messrs. Heflin, Francis, and Swan, Presidents

of the Federal Reserve Banks of Richmond,

St. Louis, and San Francisco, respectively

Mr. Holland, Secretary

Mr. Sherman, Assistant Secretary

Mr. Kenyon, Assistant Secretary

Mr. Broida, Assistant Secretary

Mr. Hackley, General Counsel

Mr. Brill, Economist

Messrs. Axilrod, Hersey, Kareken, Link, Mann,

Partee, Solomon, and Taylor, Associate

Economists

Mr. Holmes, Manager, System Open Market

Account

Mr. Coombs, Special Manager, System Open

Market Account

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Messrs. Coyne and Nichols, Special Assistants

to the Board of Governors

Mr. Williams, Adviser, Division of Research

and Statistics, Board of Governors

Mr. Wernick, Associate Adviser, Division of

Research and Statistics, Board of Governors

Mr. Keir, Assistant Adviser, Division of

Research and Statistics, Board of Governors

Mr. Bernard, Special Assistant, Office of the

Secretary, Board of Governors

Miss Eaton, Open Market Secretariat Assistant,

Office of the Secretary, Board of Governors

Messrs. Eisenmenger, Eastburn, Snellings,

Baughman, Jones, Tow, Green, and Craven,

Vice Presidents of the Federal Reserve

Banks of Boston, Philadelphia, Richmond,

Chicago, St. Louis, Kansas City, Dallas,

and San Francisco, respectively

Mr. Meek, Assistant Vice President, Federal

Reserve Bank of New York

By unanimous vote, the minutes of actions taken at the meeting

of the Federal Open Market Committee held on December 17, 1968, were

approved.

The memorandum of discussion for the meeting of the Federal

Open Market Committee held on December 17, 1968, was accepted.

The reports of audit of the System Open Market Account and of

foreign currency transactions, made by the Board's Division of Federal

Reserve Bank Operations as at the close of business on October 18, 1968,

and submitted by Mr. Schaeffer, Chief Federal Reserve Examiner, were

accepted.

By unanimous vote, the System open market transactions in

foreign currencies during the period December 17, 1968, through

January 13, 1969, were approved, ratified, and confirmed.

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By unanimous vote, the open market transactions in Government

securities, agency obligations, and bankers' acceptances during the

period December 17, 1968, through January 13, 1969, were approved,

ratified, and confirmed.

With Mr. Morris dissenting, the Federal Reserve Bank was autho

rized and directed, until otherwise directed by the Committee, to

execute transactions in the System Account in accordance with the

following current economic policy directive:

The information reviewed at this meeting suggests

that expansion in real economic activity has been mod

erating, with slower growth in consumer outlays but

higher rates of business inventory accumulation and

capital expenditures. Upward pressures on prices and

costs, however, are persisting. Since the mid-December

firming of monetary policy, most interest rates have

risen further and, with the outstanding volume of large

denomination CD's declining sharply, bank credit expansion

has slowed. Growth in the money supply moderated somewhat

on average in December from its rapid November pace. The

U.S. foreign trade surplus remains very small but near the

end of the year unusual capital inflows had a markedly

favorable effect on the over-all balance of payments. In

this situation, it is the policy of the Federal Open Market

Committee to foster financial conditions conducive to the

reduction of inflationary pressures, with a view to encour

aging a more sustainable rate of economic growth and attain

ing reasonable equilibrium in the country's balance of

payments.

To implement this policy, System open market operations

until the next meeting of the Committee shall be conducted

with a view to maintaining the prevailing firm conditions in

money and short-term credit markets; provided, however, that

operations shall be modified, to the extent permitted by the

forthcoming Treasury refunding, if bank credit expansion

appears to be deviating significantly from current projections.

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It was agreed that the next meeting of the Committee would

be held on Tuesday, February 4, 1969, at 9:30 a.m.

The meeting adjourned.

Secretary