March 19–20, 1973 FOMC Record of Policy Actions

FOMC minutes

3/19-20/73 Votes for this action: Messrs. Burns, Hayes, Balles, Brimmer, Bucher, Daane, Francis, Mayo, Mitchell, Morris, Robertson, and Sheehan. Votes against this action: None. On April 11, 1973, less than one week before the date scheduled for the Committee's next meeting, the System Account Manager reported that in light of the latest estimates for RPD's and the monetary aggregates, he interpreted the Committee's instructions to call for reserve-supplying operations consistent with an easing in money market conditions. On that day a majority members concurred in a recommendation by the Chairman of the such operations not be undertaken prior to the next meeting, that when the Committee would have an opportunity to deliberate on the appropriate policy course. 2. Ratification of earlier action On March 15, 1973, Committee members had voted to increase from $2 billion to $3 billion the limit on changes between Committee meetings in System Account holdings of U.S. Government and Federal agency securities specified in paragraph 1(a) of the continuing authority directive with respect to

3/19-20/73 domestic open market operations, effective immediately, for the period ending with the close of business on March 20, Votes for this action: Messrs. Hayes, Balles, Brimmer, Bucher, Francis, Mayo, Mitchell, Morris, and Robertson. Votes against this action: None. Absent and not voting: Messrs. Burns, Daane, and Sheehan. This action, which was ratified by unanimous vote at this meeting, had been taken on recommendation of the System Account Manager. The Manager had advised that a substantial volume of open market purchases of Treasury and Federal agency securities had been required in the period since the Committee's previous meeting in order to offset the reserve absorption caused by a sizable unanticipated rise in Treasury balances at Federal Reserve Banks, an increase in currency in circulation, and changes in certain other market factors, and that a temporary increase in the leeway for System purchases appeared desirable in light of the prospective near-term needs to supply reserves.

3/19-20/73 to continuing authorizations 3. Review of and amendments of the Federal Open Market being the first meeting This of new members from the Federal Committee following the election Reserve Banks to serve for the year beginning March 1, 1973, and duties, the Committee followed its customary their assumption of authorizations and of reviewing all of its continuing practice directives. The Committee concurred in a staff recommendation that, in the interest of simplicity and logic, the titles of three of these instruments should be changed and that corresponding amendments should be made in the text passages of certain instruments that referred to other instruments by title. The changes in titles were as follows: from "continuing authority directive with respect to domestic open market operations" to "authorization for domestic open market operations"; from "current economic policy directive" to "domestic policy directive"; and from "authorization for System foreign currency operations" to "authorization for foreign currency operations." The text passages amended to reflect these title changes were paragraph 1 of the authorization for domestic open market operations and paragraphs 2C and 2D of the foreign currency directive.

3/19-20/73 The Committee also amended its authorization for foreign currency operations in two respects to remove certain duplications that resulted from revisions made earlier in the year in its Rules / of Organization and Rules of Procedure.7 The amendments involved deletion of paragraph 10 and a revision of paragraph 6 to read as follows: The Subcommittee named in Section 272.4(c) of the Committee's Rules of Procedure is authorized to act on behalf of the Committee when it is necessary to enable the Federal Reserve Bank of New York to engage in foreign currency operations before the Committee can be consulted. All actions taken by the Subcommittee under this paragraph shall be reported promptly to the Committee. Except for the changes resulting from these actions, the Committee reaffirmed its domestic and foreign currency authorizations and its domestic and foreign currency directives in the form in which each was outstanding at the beginning of the year 1973. Votes for these actions: Messrs. Burns, Hayes, Balles, Brimmer, Bucher, Daane, Francis, Mayo, Mitchell, Morris, Robertson, and Sheehan. Votes against these actions: None. 7/ Revised Rules of Organization, Rules of Procedure, and Regulation relating to Open Market Operations of Federal Reserve Banks, as well as miscellaneous amendments to the Rules Regarding Availability of Information, as approved by the Committee on January 16, 1973, effective February 1, 1973, were published in the Federal Register for January 30, 1973.