FOMC Minutes

Meeting of the Federal Open Market Committee

February 24, 1981

Minutes of Actions

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

February 24, 1981, at 12:00 noon, 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 1/, Vice Chairman

Mr. Gramley

Mr. Guffey

Mr. Morris

Mr. Partee

Mr. Rice

Mr. Roos

Mr. Schultz

Mrs. Teeters

Mr. Winn

(New York)

(Kansas City)

(Boston)

(St

Louis)

(Cleveland)

Messrs. Boykin (Dallas), and Mayo (Chicago), Alternate

Members of the Federal Open Market Committee

Messrs. Black (Richmond), and Corrigan (Minneapolis),

Presidents of the Federal Reserve Banks of Richmond

and Minneapolis, respectively

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

1/

Left the meeting prior to the vote to adopt a modification of the domestic

policy directive.

- 2 -

2/24/81

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

System Open Market Account

Mr. Sternlight (New York), Manager for Domestic

Operations, System Open Market Account

Mr. Coyne, Assistant to the Board of Governors

Mr. Prell, Associate Director, Division of Research and

Statistics, Board of Governors

Mrs. Steele, Economist, Open Market Secretariat, Board

of Governors

Mr. Smoot (Philadelphia), First Vice President, Federal

Reserve Bank of Philadelphia

Messrs. Burns (Dallas), Danforth (Minneapolis) Keran

(San Francisco), Koch (Atlanta), Parthemos (Richmond),

Scheld and Syron, Senior Vice Presidents, Federal

Reserve Banks of Dallas, Minneapolis, San Francisco,

Atlanta, Richmond, Chicago, and Boston, respectively

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

Bank of Chicago

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

Reserve Bank of New York

With Mr. Roos dissenting, the Committee adopted the following

modification of policy directive adopted on February 3, 1981:

"In light of the relatively strong growth of M-2 and

M-3 and the substantial easing recently in money market

conditions, as well as uncertainties about the interpretation

of the behavior of M-1, the Committee on February 24 agreed

to accept some shortfall in growth of M-1A and M-1B from

the specified rates in the domestic policy directive adopted

on February 3 as consistent with developments in the

aggregates generally and the objectives for the year."

The meeting adjourned.

Secretary