FOMC Minutes
Meeting of Federal Open Market Committee
April 18, 1972
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 18, 1972, at 9:30 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Burns, Chairman
Hayes, Vice Chairman
Brimmer
Coldwell
Daane
Eastburn
MacLaury
Maisel
Mitchell
Robertson
Sheehan
Winn
Messrs. Francis, Heflin, Mayo, and Swan,
Alternate Members of the Federal Open
Market Committee
Messrs. Morris, Kimbrel, and Clay, Presidents
of the Federal Reserve Banks of Boston,
Atlanta, and Kansas City, respectively
Mr. Holland, Secretary
Mr. Broida, Deputy Secretary
Messrs. Altmann and Bernard, Assistant
Secretaries
Mr. Hackley, General Counsel
Mr. Hexter, Assistant General Counsel
Mr. Partee, Senior Economist
Mr. Axilrod, Economist (Domestic Finance)
Mr. Solomon, Economist (International Finance)
Messrs. Boehne, Bryant, Gramley, Green, Hersey,
and Hocter, Associate Economists
Mr. Holmes, Manager, System Open Market Account
4/18/72
Mr. Melnicoff, Deputy Executive Director,
Board of Governors
Mr. O'Connell, General Counsel, Board of
Governors
Mr. Chase, Associate Director, Division of
Research and Statistics, Board of Governors
Messrs. Keir, Pierce, Wernick, and Williams,
Advisers, Division of Research and Statistics,
Board of Governors
Mr. Pizer, Associate Adviser, Division of
International Finance, Board of Governors
Mr. Wendel, Chief, Government Finance Section,
Division of Research and Statistics, Board
of Governors
Miss Eaton, Open Market Secretariat Assistant,
Office of the Secretary, Board of Governors
Mrs. Rehanek, Secretary, Office of the Secretary,
Board of Governors
Messrs. Parthemos, Taylor, Scheld, Andersen,
Tow, and Craven, Senior Vice Presidents,
Federal Reserve Banks of Richmond, Atlanta,
Chicago, St. Louis, Kansas City, and
San Francisco, respectively
Messrs. Bodner and Nelson, Vice Presidents,
Federal Reserve Banks of New York and
Minneapolis, respectively
Mr. Garvy, Economic Adviser, Federal Reserve
Bank of New York
Mr. Sandberg, Manager, Securities and Acceptance
Departments, Federal Reserve Bank of New York
Mrs. Greenwald, Economist, Federal Reserve Bank
of Boston
By unanimous vote, the minutes of actions taken at the meeting
of the Federal Open Market Committee held on February 15, 1972, were
approved.
The memorandum of discussion for the meeting of the Federal
Open Market Committee on February 15, 1972, was accepted.
By unanimous vote, the System open market transactions in
foreign currencies during the period March 21 through April 17, 1972,
were approved, ratified, and confirmed.
4/18/72
By unanimous vote, renewal for further periods of three months
of the eight System drawings on the National Bank of Belgium maturing
in the period May 4-25, 1972, was approved.
By unanimous vote, renewal for further periods of three months
of the three System drawings on the Swiss National Bank maturing in
the period May 10-18, 1972, was approved.
By unanimous vote, renewal for further periods of three months
of the three System drawings on the German Federal Bank maturing on
May 30, 1972, was approved.
It was agreed that a subcommittee, consisting of the Chairman
and Vice Chairman of the Committee and the Vice Chairman of the Board
of Governors, or designated alternates, should be authorized to act
on behalf of the Committee with respect to terms of settlement of
the outstanding System drawings on the German Federal Bank.
By unanimous vote, the Federal Reserve Bank of New York was
authorized, for a period up to one week from the date of this action,
to employ the procedures for establishing rates on repurchase agree
ments that were in effect prior to the amendment on April 17, 1972,
of paragraph 1(c) of the continuing authority directive with respect
to domestic open market operations.
By unanimous vote, the open market transactions in Government
securities, agency obligations, and bankers' acceptances during the
period March 21 through April 17, 1972, were approved, ratified, and
confirmed.
4/18/72
By unanimous vote, the Federal Reserve Bank of New York
was authorized and directed, until otherwise directed by the Com
mittee, to execute transactions in the System Account in accordance
with the following current economic policy directive:
The information reviewed at this meeting suggests
that real output of goods and services grew in the first
quarter at about the stepped-up rate attained in the fourth
quarter of 1971. Most measures of business activity have
shown strength recently and demands for labor have improved
further, but the unemployment rate remains high. The rise
in wholesale prices slowed in March as some farm and food
products declined sharply, but the rise in prices of indus
trial commodities remained substantial. Wage rates also
rose substantially in March and over the first quarter
as a whole. The dollar has strengthened somewhat in
exchange markets in recent weeks, and the over-all U.S.
balance of payments deficit on the official settlements
basis has been small. In January and February merchandise
imports continued to be considerably in excess of exports.
The narrowly defined money stock expanded rapidly
in February and March, bringing the annual rate of growth
over the past 6 months to about 5-1/4 per cent. Inflows
of consumer-type time and savings deposits to banks have
been strong thus far this year, although they moderated
as the first quarter progressed; inflows to nonbank thrift
institutions remained very large. Mainly reflecting swings
in U.S. Government deposits, a modest increase in the bank
credit proxy in February was followed by a large increase
in March. Market interest rates generally have continued
to rise in recent weeks.
In light of the foregoing developments, it is the
policy of the Federal Open Market Committee to foster
financial conditions conducive to sustainable real economic
growth and increased employment, abatement of inflationary
pressures, and attainment of reasonable equilibrium in
the country's balance of payments.
To implement this policy, while taking account of
capital market developments and the forthcoming Treasury
financing, the Committee seeks to achieve bank reserve
and money market conditions that will support somewhat
more moderate growth in monetary aggregates over the
months ahead.
-5
4/18/72
It was agreed that the next meeting of the Federal Open
Market Committee would be held on Tuesday, May 23,
1972, at 9:30 a.m.
The meeting adjourned.
Secretary
Cite this document
Federal Reserve (1972, April 17). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19720418
@misc{wtfs_fomc_minutes_19720418,
author = {Federal Reserve},
title = {FOMC Minutes},
year = {1972},
month = {Apr},
howpublished = {Fomc Minutes, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/fomc_minutes_19720418},
note = {Retrieved via When the Fed Speaks corpus}
}