fomc minutes · October 14, 1974

FOMC Minutes

Meeting of Federal Open Market Committee

October 14-15, 1974

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 Monday and Tuesday, October 14-15,

1974, beginning at 5:30 p.m. on Monday.

PRESENT:

Mr.

Burns, Chairman

Hayes, Vice Chairman

Black

Bucher

Clay

Holland

Kimbrel

Mitchell

Sheehan

Wallich

Winn

Messrs. Coldwell, MacLaury, Mayo, and Morris,

Alternate Members of the Federal Open

Market Committee

Mr. Eastburn, President of the Federal Reserve

Bank of Philadelphia

Mr.

Broida, Secretary

Altmann,1/ Deputy Secretary

O'Connell, General Counsel

Partee,1/ Senior Economist

Axilrod,1/ Economist (Domestic Finance)

R. Solomon,1/ Economist (International

Finance)

Messrs. Brandt,1/ Bryant,1/ Doll,1/ Hocter,1

Pierce,1/ and Reynolds,1/ Associate

Economists

Attended Tuesday session only.

10/14-15/74

Mr. Holmes,1/ Manager, System Open Market

Account

Mr. Coombs,1 / Special Manager, System Open

Market Account

Coyne,1 / Assistant to the Board of

Governors

Mr. Wonnacott,1/ Associate Director,

Division of International Finance,

Board of Governors

Mr. Keir,1/ Adviser, Division of Research

and Statistics, Board of Governors

Miss Pruitt,1/ Economist, Open Market

Secretariat, Board of Governors

Mrs. Ferrell,1/ Open Market Secretariat

Assistant, Board of Governors

Mr.

Messrs. Leonard and Williams, First Vice

Presidents of the Federal Reserve Banks

of St. Louis and San Francisco,

respectively

Messrs. Eisenmenger,1 / Boehne,1/ and Scheld,1/

Senior Vice Presidents, Federal Reserve

Banks of Boston, Philadelphia, and

respectively

Chicago

Mr. Garvy,1/ Vice President and Senior

Adviser, Federal Reserve Bank of New York

Jordan,

and Green,

Messrs. Snellings,

Vice Presidents, Federal Reserve Banks of

Richmond, St. Louis, and Dallas,

respectively

Economic Adviser, Federal

Mr. Kareken,1

Reserve Bank of Minneapolis

Mr. Keran,1/ Director of Research, Federal

Reserve Bank of San Francisco

Mr. Sandberg,1/ Assistant Vice President,

Federal Reserve Bank of New York

By unanimous vote, the Committee ratified the action of

members on September 25, 1974, authorizing and directing the Federal

Attended Tuesday session only.

10/14-15/74

Reserve Bank of New York, under the provisions of 270.4(e) of the

Regulation relating to Open Market Operations of Federal Reserve

Banks, to engage in such open market transactions in foreign curren

cies, including transactions for the System Open Market Account, as

may be necessary to carry out the arrangements that have been made

by the Federal Reserve Bank of New York, with the concurrence of

the Board of Governors of the Federal Reserve System, for the dispo

sition of assets and liabilities of the Franklin National Bank.

By unanimous vote,

the minutes of actions taken at the

meetings of the Federal Open Market Committee held on August 20

and September 10,

1974, were approved.

The memoranda of discussion for the meetings of the

Federal Open Market Committee held on August 20 and September

10,

were accepted.

1974,

By unanimous vote,

the System open market transactions in

foreign currencies during the period September 10 through October

14,

1974,

were approved,

ratified,

and confirmed.

By unanimous vote, renewal for further periods of 3 months

of System drawings on the National Bank of Belgium,

National Bank,

ing

the Swiss

and the Bank for International Settlements, matur

in the period November 4 through 15, 1974, was authorized.

10/14-15/74

-4

By unanimous vote, the open market transactions in

Government securities, agency obligations, and bankers' accept

ances during the period September 10 through October 14, 1974,

were approved, ratified, and confirmed.

With Mr. Clay 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 suggests that

real output of goods and services declined somewhat further in

the third quarter and that price and wage increases continued

large. In September industrial production increased somewhat,

reflecting settlement of work stoppages that had reduced out

put in August. An upsurge in the labor force, following

several months of relatively slow growth, raised the unemploy

ment rate from 5.4 to 5.8 per cent. The rise in wholesale

prices of industrial commodities moderated, although it remained

substantial, and prices of farm products and foods declined

after having increased sharply in July and August.

On October 8 the President recommended a program to

combat inflation and to mitigate the impact of monetary and

fiscal restraint on certain sectors of the economy. The tax

and expenditure proposals included in the program would, on

balance, have approximately a neutral effect on the size of

the Federal deficit.

In recent weeks the dollar has declined against leading

foreign currencies. The U.S. foreign trade deficit increased

substantially in August, as imports of petroleum and industrial

materials rose while exports held steady.

10/14-15/74

The narrowly defined money stock rose slightly in

September and grew at an annual rate of about 2 per cent

over the third quarter, compared with a rate of 6 per cent

in the first half of the year.

The money supply measure

more broadly defined to include bank time and savings deposits

other than money market CD's--as well as the measure that

includes deposits at other thrift institutions--also rose only

slightly in September. Over-all business credit demands slack

ened last month, and outstanding business loans at banks leveled

off.

Since early September interest rates on short-term market

instruments have fallen considerably, while yields on Treasury

and State and local government bonds have declined modestly.

Yields on corporate bonds have risen somewhat further, on

balance, reflecting the large volume of offerings in prospect.

In light of the foregoing developments, it is the policy

of the Federal Open Market Committee to foster financial con

ditions conducive to resisting inflationary pressures, supporting

a resumption of real economic growth, and achieving equilibrium

in the country's balance of payments.

To implement this policy, while taking account of the

forthcoming Treasury financing and of developments in domestic

and international financial markets, the Committee seeks to

achieve bank reserve and money market conditions consistent

with resumption of moderate growth in monetary aggregates over

the months ahead.

It was agreed that the next meeting of the Committee would

be held on November 19,

1974, at 9:30 a.m.

The meeting adjourned.

Secretary

Cite this document

APA

Federal Reserve (1974, October 14). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19741015

BibTeX

@misc{wtfs_fomc_minutes_19741015,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1974},
  month = {Oct},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19741015},
  note = {Retrieved via When the Fed Speaks corpus}
}