February 9, 1960 FOMC Minutes

FOMC minutes

adaptations in operations that might facilitate the refunding problem of the Treasury. The Committee could not very well suggest something that would serve this purpose and leave in the word "solely" so the suggestion was to shift to "primarily." The staff was advancing nothing more than a suggestion; it had simply been reaching for words that might accomplish the aforementioned purpose. Mr. Thomas noted that the change in paragraph (a) would sub stitute a general phrase and eliminate reference to a specific practice, namely, the correction of disorderly markets. The language of the present statement is subject to the possible interpretation that the Manager might take action to correct disorderly markets without coming Committee, although the minutes of the Committee's meetings to the the Manager must obtain Committee authorization clearly require that The proposed revised language is intended for taking any such action. the statement itself that the Manager must to make it clear within for the correction of Committee to obtain authorization come to the disorderly markets. clear that the had made it quite said the discussion Mr. Bryan the suggested revisions or nothing from would gain little Committee changes in actual contemplated considerable at the same time it unless wording until of the revised not favor adoption He would practice. spelled out to him. changes had been the nature of those (a) of the current and pro Mr. King referred to paragraph the statement in both versions observed that and posed statements

began by indicating what was not the policy of the Committee. While there might have been reasons for that approach in the past, he wondered whether it was still necessary to start with a negative statement. It seemed to him that it might be preferable to begin by stating what the Committee wanted to encourage. Chairman Martin then said he hoped the Committee members would try to think the problem through in all of its aspects before the date of the next meeting. He felt that the Committee was quite well united in matters of general operating policy. There were disagreements at times, but the disagreements were not nearly as widespread as they had been at times in the past. The thing for the Committee to do was to think the matter through and to know doing; to think the problem through objectively and what it was One reason for instituting the operating to look at it objectively. Government securities market, and policies had been to improve the that market had actually been question was whether or not the years. That was a logical subject improved over the past several him by several individuals had been suggested to of inquiry. It be abandoned; that operating policies right that the continuing it should not have three weeks perhaps Committee met every if the was another possible policies. That continuing operating any not put something like least the Committee should approach. At once a year. It was something on paper and debate the matter this clear in what would be that the Committee through so to be thought it was doing.

It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, March 1, 1960, at 10:00 a.m. Thereupon the meeting adjourned.

Reserve Target for February using Total Reserves (Daily average figures - 000,000 omitted) (1) February growth amount $ 31 1/ (at 2% annual rate) ....... ............ (2) Actual reserves - $ 18.854 2/ January . ........ (3) Deduct normal decline in reserves (300) between January and February . ..... $ 18,554 $ 18,554 (4) Target for February .................. . $ 18,585 (5) February Target range for practical $ 18,635 administration of account ..... . . . .. . . .. . . $ 18,535 annually would be 47.0 million; at 4 percent 1/ February growth amount at 3 percent annually would be 62.0 million. close to the ($18,704) was extraordinarily after seasonal adjustment 2/ This amount suggested at the last ($18,650 to $18,750) target range for January center of the indeed, is somewhat nothing; and, circumstance proves meeting. This FOMC attempt to show how at this meeting an experimental because it prevents regrettable instructions on a total would be handled in adjusting overages and underages short-run reserve target basis.