November 15 · Published December 22, 1995

Statement·Presser·Minutes

November 15, 1995 FOMC Minutes

Vote

• Alan S. Blinder
• Alan Greenspan
• Thomas M. Hoenig
• Edward W. Kelley, Jr.
• Lawrence B. Lindsey ↓ dissented
  • He believed that monetary policy should be eased. The evidence suggested to him that in the absence of an easing move the underlying rate of nominal GDP growth was likely to be lower than needed to maintain real GDP at or near its potential. The intermediate forecast was subject to a number of significant risks: household balance sheets seemed unlikely to sustain the current rate of durables expenditure for any extended period; government expenditures were certain to be cut substantially; and with fiscal contractions underway in Europe and Canada and severe financial stresses present in Japan and Mexico, he did not see much likelihood of a substantial expansion of exports. In keeping with his views, the financial markets were signalling the likelihood that a weaker pace of nominal GDP growth would materialize. The yield curve was virtually flat, with government securities up through relatively long maturities trading at yields below the current average federal funds rate. Thus, markets would be unlikely to find some easing inappropriate and over the intermediate horizon would view the current level of short-term rates as unsustainable.
• William J. McDonough
• Thomas C. Melzer
• Cathy E. Minehan
• Michael H. Moskow
• Susan M. Phillips
• Janet L. Yellen

From the minutes

Read the full minutes

What changed from the previous meeting’s minutes

• Staff forecast shifted from expecting higher growth to expecting an appreciable slowing in economic expansion.
• Committee's risk assessment changed from downside risks slightly greater to mixed views on how far slowing might proceed.
• One member dissented, voting for immediate easing of monetary policy; previous meeting had unanimous vote.
• Federal government shutdown was noted as a new downside risk to the expansion.
• M2 was unchanged in October, compared to sizable increases in August and moderated growth in September.
• Unemployment rate edged down to 5.5 percent in October, from 5.6 percent in August.

Summary generated automatically from the two documents.

Source