FOMC Minutes

Meeting of Federal Open Market Committee

February 4, 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.,

PRESENT:

Mr,

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

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

Martin, Chairman

Hayes, Vice Chairman

Brimmer

Daane

Galusha

Hickman

Kimbrel

Maisel

Mitchell

Morris

Robertson

Sherrill

Messrs. Clay and Coldwell, 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. Molony, Assistant Secretary

Mr. Hackley, General Counsel

Mr. Brill, Economist

Messrs. Axilrod, Hersey, Kareken, Partee,

Solomon, and Taylor, Associate

Economists

Mr. Holmes, Manager, System Open Market

Account

Mr. Cardon, Assistant to the Board of

Governors

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Messrs. Coyne and Nichols, Special

Assistants to the Board of Governors

Mr. Gramley, 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

Messrs. Hilkert and Helmer, First Vice

Presidents of the Federal Reserve

Banks of Philadelphia and Chicago,

respectively

Messrs. Eastburn, Parthemos, Baughman,

Jones, Tow, and Craven, Senior Vice

Presidents of the Federal Reserve

Banks of Philadelphia, Richmond,

Chicago, St. Louis, Kansas City, and

San Francisco, respectively

Messrs. Eisenmenger and Green, Vice

Presidents of the Federal Reserve

Banks of Boston and Dallas, respectively

Mr. Garvy, Economic Adviser, Federal Reserve

Bank of New York

Messrs. Bodner and Geng, Assistant Vice

Presidents, Federal Reserve Bank of

New York

Miss Beekel, Assistant Vice President and

Economist, Federal Reserve Bank of

Cleveland

By unanimous vote, the minutes of actions taken at the

meeting of the Federal Open Market Committee held on January 14,

1969, were approved.

The memorandum of discussion for the meeting of the Federal

Open Market Committee held on January 14, 1969, was accepted.

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By unanimous vote, the System open market transactions in

foreign currencies during the period January 14 through February 3,

1969, were approved, ratified, and confirmed.

By unanimous vote, the open market transactions in Govern

ment securities, agency obligations, and bankers' acceptances

during the period January 14 through February 3, 1969, 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, 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

moderating, but that upward pressures on prices and

costs are persisting. Prospects are for some further

slowing in economic expansion in the period ahead.

Market interest rates recently have fluctuated near the

highs reached around the turn of the year. Bank credit

contracted slightly in January on average, as the

outstanding volume of large-denomination CD's continued

to decline sharply, inflows of other time and savings

deposits slowed, and growth in the money supply

moderated. The U.S. balance of payments on the

liquidity basis appears to have reverted to deficit

in early 1969, but large inflows of Euro-dollars have

had the effect of keeping the official settlements

balance in surplus. 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 encouraging a

more sustainable rate of economic growth and attaining

reasonable equilibrium in the country's balance of

payments.

To implement this policy, while taking account

of the current Treasury refunding, System open market

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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

Treasury refunding, if bank credit appears to be

deviating significantly from current projections.

It was agreed that the next meeting of the Committee

would be held on March 4, 1969, at 9:30 a.m.

The meeting adjourned.

Secretary