FOMC Minutes
Meeting of Federal Open Market Committee
October 21, 1975
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, October 21,
1975,
at
9:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Burns, Chairman
Volcker, Vice Chairman
Baughman
Coldwell
Eastburn
Holland
Jackson
MacLaury
Mayo
Mitchell
Wallich
Messrs. Balles, Black, and Winn,
Alternate Members of the Federal Open
Market Committee
Messrs. Clay, Kimbrel, and Morris,
Presidents of the Federal Reserve Banks
of Kansas City, Atlanta, and Boston,
respectively
Mr. Broida, Secretary
Mr. Altmann, Deputy Secretary
Mr. Bernard, Assistant Secretary
Mr. O'Connell, General Counsel
Mr. Partee, Senior Economist
Mr. Axilrod, Economist (Domestic Finance)
Mr. Gramley, Economist (Domestic Business)
Mr. Solomon, Economist (International Finance)
Messrs. Boehne, Davis, Green, Kareken,
Reynolds, and Scheld, Associate Economists
10/21/75
Mr. Pardee, Deputy Manager for Foreign
Operations
Mr. Sternlight, Deputy Manager for Domestic
Operations
Mr. Coyne, Assistant to the Board of
Governors
Mr. Zeisel,1 / Associate Director, Division
of Research and Statistics, Board of
Governors
Mr. Keir, Adviser, Division of Research and
Statistics, Board of Governors
Mr. Gemmill, Adviser, Division of International
Finance Board of Governors
Mr. Wendel,1/ Associate Adviser, Division of
Research and Statistics, Board of
Governors
Mrs. Farar, Economist, Open Market Secretariat,
Board of Governors
Mrs. Ferrell, Open Market Secretariat
Assistant, Board of Governors
Mr. Leonard, First Vice President, Federal
Reserve Bank of St. Louis
Messrs. Eisenmenger, Parthemos, and Doll,
Senior Vice Presidents, Federal Reserve
Banks of Boston, Richmond, and Kansas City,
respectively
Messrs. Hocter, Brandt, and Balbach, Vice
Presidents, Federal Reserve Banks of
Cleveland, Atlanta, and St. Louis,
respectively
Mr. Keran, Director of Research, Federal
Reserve Bank of San Francisco
Ms. Tschinkel, Adviser, Open Market Operations,
Federal Reserve Bank of New York
1/
Joined the meeting at point indicated.
10/21/75
By unanimous vote, the Committee ratified the action taken
by members on October 3, 1975, increasing from $3 billion to $4
billion the limit specified in paragraph 1(a) of Authorization for
Domestic Open Market Operations, on changes between meetings in
System holdings of U.S. Government and Federal agency securities,
effective October 3, 1975, through the close of business October 21, 1975.
By unanimous vote, the minutes of actions taken at the meeting
of the Federal Open Market Committee on September 16, 1975, were
approved.
By unanimous vote, the memoranda of discussion for the meetings
of the Federal Open Market Committee on August 19 and September
16, 1975, were accepted.
By unanimous vote, the System open market transactions in
foreign currencies during the period September 16 through October
20, 1975, were approved, ratified, and confirmed.
By unanimous vote, the open market transactions in
Government securities, agency obligations, and bankers' acceptances
during the period September 16 through October 20, 1975, 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 November 5-14, 1975, was authorized.
10/21/75
Messrs. Zeisel and Wendel entered the meeting after the
foregoing item and left prior to the following item.
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 domestic policy directive:
The information reviewed at this meeting suggests
that output of goods and services--which had turned up
in the second quarter--increased sharply further in the
third quarter. In recent months retail sales have been
maintained at the higher levels reached in early summer,
and industrial production has strengthened progressively.
Nonfarm payroll employment continued to expand in September,
and the unemployment rate edged down from 8.4 to 8.3 per
cent. In September, as in August, average wholesale prices
of industrial commodities rose somewhat faster than earlier
in the year, in part because of increases in prices of
energy products; prices of farm and food products rose
sharply in September. The advance in average wage rates
in recent months has remained somewhat less rapid than in
1974 and early 1975.
After rising further in late September, the exchange
value of the dollar against leading foreign currencies has
declined to about its mid-September level. In August the
U.S. foreign trade surplus increased as agricultural exports
rose. Bank-reported private capital movements showed a
further net inflow, while U.S. liabilities to foreign
official agencies declined again.
M1 rose slightly on the average in September but
declined in the latter part of the month and in early
October. From the second to the third quarter, however,
M1 grew at a 6.9 per cent annual rate. Inflows of con
sumer type-time and savings deposits to banks and to
10/21/75
nonbank thrift institutions continued to moderate in
September, reflecting in part the attractiveness of
alternative investments, and growth in M 2 and M 3 slowed
further. Although conditions in markets for State and
local government securities continued to be adversely
affected by New York's financial problems, most short
and long-term interest rates have declined in recent
weeks.
On October 15 the Board of Governors announced
a reduction of member bank reserve requirements on
long-term time deposits.
In light of the foregoing developments, it is the
policy of the Federal Open Market Committee to foster
financial conditions that will encourage continued
economic recovery, while resisting inflationary pressures
and contributing to a sustainable pattern of international
transactions.
To implement this policy, while taking account of
developments in domestic and international financial
markets, the Committee seeks to achieve bank reserve and
money market conditions consistent with moderate growth
in monetary aggregates over the months ahead.
It was agreed that the next meeting of the Committee would
be held on November 18, 1975.
The meeting adjourned.
Secretary
Cite this document
Federal Reserve (1975, October 20). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19751021
@misc{wtfs_fomc_minutes_19751021,
author = {Federal Reserve},
title = {FOMC Minutes},
year = {1975},
month = {Oct},
howpublished = {Fomc Minutes, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/fomc_minutes_19751021},
note = {Retrieved via When the Fed Speaks corpus}
}