FOMC Minutes

Meeting of the Federal Open Market Committee

December 5, 1980

A meeting of the Federal Open Market Committee was held on Friday,

December 5, 1980, at 2:10 p.m., at the call of Chairman Volcker.

This was a

telephone conference meeting, and each individual was in Washington, D. C.,

except as otherwise indicated in parentheses in the following list of those

participating.

PRESENT:

Mr. Volcker, Chairman

Mr. Solomon, Vice Chairman

Mr. Gramley

Mr. Guffey

Mr. Morris

Mr. Partee

Mr. Rice

Mr. Roos

Mrs. Teeters

Mr. Wallich

Mr. Winn

(New York)

(Kansas City)

(Boston)

(St. Louis)

(Cleveland)

Messrs. Balles (San Francisco), Baughman (Dallas), Eastburn

(Philadelphia), Mayo (Chicago), and Timlen (New York),

Alternate Members of the Federal Open Market Committee

Mr. Corrigan (Minneapolis), President of the Federal Reserve

Bank of Minneapolis

Mr.

Mr.

Mr.

Mr.

Altmann, Secretary

Bernard, Assistant Secretary

Oltman (New York), Deputy General Counsel

Axilrod, Economist

Messrs. Balbach (St. Louis), J. Davis (Cleveland),

R. Davis (New York), T. Davis (Kansas City),

Eisenmenger (Boston), Ettin, Henry, Keir,

Kichline, Truman, and Zeisel, Associate Economists

Mr. Pardee (New York), Manager for Foreign Operations,

System Open Market Account

Mr. Sternlight (New York), Manager for Domestic

Operations, System Open Market Account

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11/18/80

Mr. Coyne, Assistant to the Board of Governors

Mr. Beck, Senior Economist, Banking Section, Division of

Research and Statistics, Board of Governors

Messrs. Boehne (Philadelphia), Burns (Dallas), Fousek

(New York), Keran (San Francisco), and Scheld,

Senior Vice Presidents, Federal Reserve Banks of

Philadelphia, Dallas, New York, San Francisco, and

Chicago, respectively

Mr. Meek (New York), Monetary Adviser, Federal Reserve

Bank of New York

Mrs. Nichols (Chicago), Vice President, Federal Reserve

Bank of Chicago

Mr. Campbell (New York), Assistant Secretary, Federal

Reserve Bank of New York

With Mrs. Teeters and Mr. Wallich dissenting, the Committee modified

the domestic policy directive adopted at its meeting on November 18, 1980, and

subsequently modified in a telephone meeting on November 26, to take account

of the action of the Board of Governors on December 4 to raise discount rates

by providing leeway for pursuit of the Committee's short-run objectives for

the behavior of reserve aggregates without operations being precisely con

strained in the current statement week by the 18 percent upper limit of the

intermeeting range for the federal funds rate.

The meeting adjourned.

Secretary