FOMC Minutes
Meeting of Federal Open Market Committee
July 17, 1973
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, July 17, 1973, at 9:30 a.m.
As
indicated below, only a limited number of staff members were in
attendance during the first part of the meeting.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Burns, Chairman
Hayes, Vice Chairman
Balles
Brimmer
Bucher
Daane
Francis
Holland
Mayo
Morris
Sheehan
Messrs. Clay, Kimbrel, and Winn, Alternate
Members of the Federal Open Market
Committee
Messrs. MacLaury and Coldwell, Presidents
of the Federal Reserve Banks of
Minneapolis and Dallas, respectively
Mr. Broida, Secretary
Mr. Altmann, Assistant Secretary
Mr. O'Connell, General Counsel
Mr. Partee, Senior Economist
Mr. Axilrod, Economist (Domestic Finance)
Messrs. Bryant and Reynolds, Associate
Economists
Mr. Sternlight, Deputy Manager, System
Open Market Account
Mr. Coombs, Special Manager, System
Open Market Account
7/17/73
Mr. Melnicoff, Deputy Executive Director,
Board of Governors
Mr. Coyne, Assistant to the Board of
Governors
Mr. Gemmill, Advisor, Division of International
Finance, Board of Governors
Messrs. Willes and Black, First Vice Presidents
of the Federal Reserve Banks of Philadelphia
and Richmond, respectively
By unanimous vote, the System open market transactions in
foreign currencies during the period June 19 through July 16, 1973,
were approved, ratified, and confirmed.
By unanimous vote, renewal for further periods of 3 months of
System drawings on the National Bank of Belgium, the Swiss National
Bank, and the Bank for International Settlements, maturing in the
period August 2-23, 1973, was authorized.
The following then entered the meeting:
Mr. Bernard, Assistant Secretary
Messrs. Andersen, Eisenmenger, Gramley,
Scheld, and Sims, Associate Economists
Mr. Feldberg, Secretary to the Board of
Governors
Mr. O'Brien, Special Assistant to the
Board of Governors
Messrs. Keir, Wernick, and Williams, Advisers,
Division of Research and Statistics,
Board of Governors
Mr. Struble, Senior Economist, Government Finance
Section, Division of Research and Statistics,
Board of Governors
Mrs. Ferrell, Open Market Secretariat
Assistant, Office of the Secretary,
Board of Governors
Mrs. Peters, Secretary, Office of the
Secretary, Board of Governors
Messrs. Boehne, Taylor, and Doll, Senior
Vice Presidents, Federal Reserve Banks
of Philadelphia, Atlanta, and Kansas
City, respectively
Messrs. Davis, Hocter, and Green, Vice
Presidents, Federal Reserve Banks of
New York, Cleveland, and Dallas,
respectively
Mr. Meek, Monetary Adviser,
Federal Reserve Bank of New York
Mr. Broaddus, Assistant Vice President,
Federal Reserve Bank of Richmond
Mr. Rolnick, Economist, Federal Reserve
Bank of Minneapolis
By unanimous vote, the action of members of the Federal Open
Market Committee on July 6, 1973, increasing from $2 billion to $3
billion the limit specified in paragraph 1(a) of the authorization for
domestic open market operations on net changes between Committee
meetings in System Account holdings of U. S. Government securities
and
agency issues, for the period through the close of business on
July 17, 1973, was ratified.
By unanimous vote, the minutes of actions taken at the
meeting of the Federal Open Market Committee held on May 15, 1973,
were approved.
The memorandum of discussion for the meeting of the Federal
Open Market Committee held on May 15, 1973, was accepted.
By unanimous vote, the open market transactions in Government
securities, agency obligations, and bankers' acceptances during the
period June 19 through July 16, 1973, were approved, ratified, and
confirmed.
7/17/73
With Mr. Francis dissenting, the Federal Reserve Bank
of New York was authorized and directed, until otherwise directed
by the Committee,
to execute transactions for the System Account
in accordance with the following domestic policy directive:
The information reviewed at this meeting, including
recent developments in industrial production, employment,
and retail sales, suggests that growth in economic activity
moderated in the second quarter from the exceptionally
rapid pace of the two preceding quarters.
Increases in
employment were relatively substantial, however, and in
June the unemployment rate dropped below 5 per cent.
Wage rates advanced at a faster pace during the second quar
ter than earlier in the year. In the months immediately
preceding the price freeze imposed in mid-June, the rise
in prices of both industrial commodities and farm and food
products remained extraordinarily rapid.
The U.S. merchandise trade balance worsened in May
as import prices rose sharply further, but the trade deficit
remained well below the first-quarter average. In foreign
exchange markets, the jointly floating continental European
currencies rose sharply further against the dollar in
early July. After the first week in July, the dollar
recovered somewhat on the basis of market expectations of
official intervention. On July 10 the Federal Reserve
announced substantial increases in its swap arrangements
with other central banks.
Both the narrowly and more broadly defined money stock
rose sharply in May and June, although inflows of consumer
type time and savings deposits slackened somewhat in the
latter month. Expansion in bank credit continued at a
substantial pace. Since mid-June both short- and long-term
market interest rates have advanced considerably further,
with the sharpest increases in the short-term sector. On
June 29 increases were announced in Federal Reserve discount
rates, from 6-1/2 to 7 per cent, and in member bank reserve
requirements; on July 5 ceiling interest rates were increased
on time and savings deposits at commercial banks and other
thrift institutions.
-5
7/17/73
In light of the foregoing developments, it is the policy
of the Federal Open Market Committee to foster financial
conditions conducive to abatement of inflationary pressures,
a more sustainable rate of advance in economic activity,
and progress toward equilibrium in the country's balance
of payments.
To implement this policy, while taking account of
international and domestic financial market developments
and the forthcoming Treasury financing, the Committee seeks
to achieve bank reserve and money market conditions con
sistent with slower growth in monetary aggregates over the
months immediately ahead than occurred on average in the
first half of the year.
It was agreed that the next meeting of the Federal Open
Market Committee would be held on Tuesday, August 21, 1973, at 9:30 a.m.
The meeting adjourned.
Secretary
Cite this document
Federal Reserve (1973, July 16). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19730717
@misc{wtfs_fomc_minutes_19730717,
author = {Federal Reserve},
title = {FOMC Minutes},
year = {1973},
month = {Jul},
howpublished = {Fomc Minutes, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/fomc_minutes_19730717},
note = {Retrieved via When the Fed Speaks corpus}
}