March 25 · Published May 22, 1997
Statement·Presser·Minutes
AGAlan GreenspanMarch 25, 1997 FOMC Minutes
Our reading
The minutes are consistent with the statement because they detail the FOMC's decision to slightly tighten monetary policy (raising the federal funds rate by 1/4 percentage point to around 5-1/2 percent) in response to persisting strength in demand and rising inflationary risks, while also noting that no change was made to the discount rate.
Our reading compares the minutes of the March 25 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- J. Alfred Broaddus, Jr.
- Alan Greenspan
- Jack Guynn
- Edward W. Kelley, Jr.
- William J. McDonough
- Laurence H. Meyer
- Michael H. Moskow
- Robert T. Parry
- Susan M. Phillips
- Alice M. Rivlin
From the minutes
FOMC minutes
It was agreed that the next meeting of the Committee would be held on Tuesday, May 20, 1997.
The meeting adjourned at 12:20 p.m.
Donald L. Kohn
Secretary
What changed from the previous meeting’s minutes
- The FOMC shifted from maintaining unchanged policy to slightly increasing reserve restraint.
- The directive changed from an asymmetric bias toward tightening to a symmetric stance.
- Members noted inflation risks had increased appreciably due to persistent demand strength.
- The FOMC moved from a "wait and see" stance to a preemptive tightening action.
- Labor market tightness was seen as intensifying, with compensation data suggesting some acceleration.
- The directive's reserve restraint language changed from "somewhat greater" to "slightly greater" acceptable.
Summary generated automatically from the two documents.