FOMC Minutes

Meeting of Federal Open Market Committee

April 1,

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, April 1, 1969, at 9:30 a.m.

PRESENT:

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Martin, Chairman 1 /

Bopp

Brimmer

Clay

Coldwell

Daane

Maisel

Mitchell

Robertson

Scanlon

Sherrill

Treiber, Alternate for Mr. Hayes

Messrs. Francis, Hickman, and Swan, Alternate

Members of the Federal Open Market Committee

Messrs. Morris, Kimbrel, and Galusha, Presidents

of the Federal Reserve Banks of Boston,

Atlanta, and Minneapolis, respectively

Mr. Holland, Secretary

Mr. Broida, Deputy Secretary

Messrs. Kenyon and Molony, Assistant

Secretaries

Mr. Hackley, General Counsel

Mr. Brill, Economist

Messrs. Axilrod, Baughman, Eastburn, Green,

Hersey, Link, Partee, Reynolds, Solomon,

and Tow, Associate Economists

Mr. Holmes, Manager, System Open Market

Account

Mr. Coombs, Special Manager, System Open

Market Account

1/

Entered the meeting at the point indicated.

4/1/69

Mr. Sherman, Consultant, Board of Governors

Mr. Cardon, Assistant to the Board of

Governors

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

Mr. Black, First Vice President, Federal

Reserve Bank of Richmond

Messrs. Parthemos, Jones, and Craven,

Senior Vice Presidents of the Federal

Reserve Banks of Richmond, St. Louis,

and San Francisco, respectively

Mr. Brandt, Vice President of the Federal

Reserve Bank of Atlanta

Mr. Kareken, Economic Adviser, Federal

Reserve Bank of Minneapolis

Miss Beekel, Assistant Vice President and

Economist, Federal Reserve Bank of

Cleveland

Mr. Meek, Assistant Vice President, Federal

Reserve Bank of New York

Mr. Anderson, Financial Economist, Federal

Reserve Bank of Boston

By unanimous vote, Mr. Robertson was elected Acting Chairman

for the period until Chairman Martin entered the meeting.

By unanimous vote, the minutes of actions taken at the

meeting of the Federal Open Market Committee held on March 4, 1969,

were approved.

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4/1/69

The memorandum of discussion for the meeting of the Federal

Open Market Committee held on March 4, 1969, was accepted.

Chairman Martin entered the room and assumed the chair.

By unanimous vote, the System open market transactions in

foreign currencies during the period March 4 through 31, 1969,

were approved, ratified, and confirmed.

By unanimous vote, the open market transactions in

Government securities, agency obligations, and bankers' acceptances

during the period March 4 through 31, 1969, were approved, ratified,

and confirmed.

With Messrs. Coldwell and Maisel dissenting, 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, while expansion in real economic activity has

moderated somewhat further, current and prospective

activity now appears stronger than earlier projections

had indicated. Substantial upward pressures on prices

and costs are persisting. Most long-term interest rates

have risen further on balance in recent weeks, but

movements in short-term rates have been mixed. In the

first quarter of the year bank credit changed little on

average, as investments contracted while loans expanded

further. In March the outstanding volume of large

denomination CD's continued to decline sharply; inflows

of other time and savings deposits were moderate; and

growth in the money supply remained at a sharply reduced

rate. It appears that a sizable deficit reemerged in

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the U.S. balance of payments on the liquidity basis in

the first quarter but that the balance on the official

settlements basis remained in surplus as a result of

further large inflows of Euro-dollars. 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, System open market

operations until the next meeting of the Committee shall

be conducted with a view to maintaining firm conditions

in money and short-term credit markets, taking account

of the effects of other possible monetary policy action;

provided, however, that operations shall be modified 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 Tuesday, April 29, 1969, at 9:30 a.m.

The meeting adjourned.

Secretary