FOMC Minutes

Meeting of Federal Open Market Committee

April 29, 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 29, 1969, at

9:30 a.m.

PRESENT:

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Martin, Chairman

Hayes, Vice Chairman

Bopp

Brimmer

Clay

Coldwell

Daane

Maisel

Mitchell

Robertson

Scanlon

Messrs. Francis, Heflin, 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, Partee, Solomon, and Tow,

Associate Economists

Mr. Coombs, Special Manager, System Open

Market Account

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Mr. Sherman, Consultant, Board of

Governors

Messrs. Coyne and Nichols, Special

Assistants to the Board of Governors

Mr. Wernick, Associate Adviser, Divi

sion 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 Assis

tant, Office of the Secretary, Board

of Governors

Messrs. Taylor, Jones, and Craven, Senior

Vice Presidents of the Federal Reserve

Banks of Atlanta, St. Louis, and San

Francisco, respectively

Messrs. Eisenmenger, Sternlight, and

Snellings, Vice Presidents of the

Federal Reserve Banks of Boston,

New York, and Richmond, respectively

Mr. Davis, Adviser, Federal Reserve Bank

of New York

Messrs. Geng and Shotwell, Assistant Vice

Presidents of the Federal Reserve Banks

of New York and Cleveland, respectively

Mr. Kareken, Economic Adviser, Federal

Reserve Bank of Minneapolis

By unanimous vote, the minutes of actions taken at the

meeting of the Federal Open Market Committee held on April 1, 1969,

were approved.

The memorandum of discussion for the meeting of the

Federal Open Market Committee held on April 1, 1969, was accepted.

By unanimous vote, the System open market transactions in

foreign currencies during the period April 1 through 28, 1969,

were approved, ratified, and confirmed.

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4/29/69

With Messrs. Brimmer and Mitchell dissenting, renewal for

further periods of three months, if requested, of the four swap

drawings by the Bank of France maturing in the period May 19-20,

1969, and totaling $281 million, was authorized.

With Mr. Brimmer dissenting, renewal for further periods of

three months, if requested, of the seven swap drawings by the Bank

of England maturing in the period May 20 - June 4, 1969, and

totaling $800 million, was authorized.

By unanimous vote, the open market transactions in Govern

ment securities, agency obligations, and bankers' acceptances

during the period April 1 through 28, 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 moderated

only slightly since the fourth quarter of 1968. At the

same time, substantial upward pressures on prices and

costs are persisting. Long-term interest rates have

generally declined in recent weeks, but most short-term

rates have risen somewhat. In the first quarter of the

year bank credit changed little on average and the

money supply grew at a sharply reduced rate. In early

April both measures increased substantially, influenced

in part by large tax-date borrowing and deposit bulges

around Easter. The outstanding volume of large-denom

ination CD's has continued to decline and there

was a net outflow of consumer-type time and savings

4/29/69

deposits from banks and other thrift institutions in

the first half of April.

A sizable deficit reemerged

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

basis in the first quarter but the balance on the

official settlements basis remained in surplus as a

result of 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, while taking account of

the forthcoming Treasury refunding, System open market

operations until the next meeting of the Committee

shall be conducted with a view to maintaining the pre

vailing 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 Tuesday, May 27, 1969, at 9:30 a.m.

The meeting adjourned.

Secretary