March 26, 1963 FOMC Minutes

FOMC minutes

The Chairman also commented that he would associate himself with the view that any deviations from the status quo in the forth coming period should preferably be on the side of firmness. However, this was a minor point; he would not want to vote against the suggested policy directive. Thereupon, upon motior duly made and seconded, the Federal Reserve Bank of New York was authorized and directed, until otherwise directed by the Committee, to execute transactions in the System Open Market Account in accordance with the follow ing current economic policy directive: It is the Committee's current policy to accommodate moderate growth in bank credit, while aiming at money market conditions that would minimize capital outflows internationally. This policy takes into account the continuing adverse United States balance of payments position and the increases in bank credit, money supply, and the reserve base in recent months, but at the same time recognizes the limited progress of the domestic economy, the continuing underutilization of resources, and the absence of general inflationary pressures. To implement this policy in a period of a Treasury bond financing, System open market operations during the next three weeks shall be conducted with a view to maintaining about the same degree of firmness in the money market that has prevailed weeks, while accommodating moderate reserve expansion. in recent Votes for this action: Messrs. Martin, Balderston, Bopp, Clay, Irons, King, Mills, Mitchell, Robertson, Scanlon, and Shepardson. against this action: Mr. Hayes. Vote Chairman Martin referred at this point to the report on open during the year 1962 prepared by the Manager of the market operations System Open Market Account, noting that it had been suggested that the

Open Market Committee might want to authorize publication in the April issue of the Federal Reserve Bulletin of the main part of the report. The article would parallel the one on foreign currency operations, prepared by the Special Manager, that had appeared in the March issue of the Bulletin. Copies of the report, in form suggested for publication, would be distributed to the members of the Committee for their comments. There was general agreement that the publication of such an article in the Bulletin would be desirable for the purpose of con tributing to a better public understanding of System open market operations. It was suggested that the article be published as an informational review--like the article on foreign currency operationsrather than in the form of a report by the Manager of the Committee. There was concurrence with this suggestion, and also with the view that it would be desirable for the article to include a rather sub stantial description of actual open market operations. Question was raised about the possibility of distribution of the article by a Federal Reserve Bank within its District subsequent to the publication of the April issue of the Bulletin. It was stated, that reprints of the Bulletin article would be in this connection, available from the Board's offices for such distribution as Federal Reserve Banks might want to make. This procedure, it was suggested, would seem preferable to the inclusion of the article as part of the content of the monthly review of a Reserve Bank.

There had been distributed to the members of the Committee by the Secretary, under date of March 25, 1963, a brief summary statement of the economic position, with the notation that it was expected to be used as a basis for preparing a portion of the entry for today's meeting that would be included in the record of policy actions taken by the Committee. It had recently been the practice to incorporate such a background statement at the end of the minutes of the respective meetings in order that the Committee members might have an opportunity to make comments and suggestions, as a step toward the preparation of the policy record entries. expediting Question was raised whether it was necessary to incorporate the text of these statements of the economic position in the minutes, might be accomplished if the being suggested that the same purpose it distributed separately. There was general background statements were with this procedural suggestion. agreement that the next meeting of the Federal Open Market It was agreed Committee would be held on Tuesday, April 16, 1963. then withdrew except the Members All of those in attendance of the Committee, the Reserve Bank Presidents and Alternate Members not currently serving on the Committee, and Messrs. Young, Sherman, Kenyon, and Stone. informally on certain discussions Chairman Martin reported in the area dealt with in the that he had had concerning matters

staff papers that had been distributed at the March 5 Committee meeting. He also reported, as a matter of information, on plans that had been announced by the Chairman of the House Banking and Currency Committee for hearings by the Committee in regard to System matters, probably beginning some time this Federal Reserve summer. The meeting then adjourned. Secretary