December 16 · Published February 5, 1998

Statement·Presser·Minutes

December 16, 1997 FOMC Minutes

Vote

• J. Alfred Broaddus, Jr. ↑ dissented
  • Mr. Broaddus dissented because he continued to believe that a modest tightening of policy would be prudent in light of the apparent persisting strength in aggregate demand for goods and services. He recognized the case for holding policy steady given recent developments in East Asian economies and financial markets; he believed, however, that a slight firming at this meeting would provide valuable insurance against the risk that demand growth might remain above a sustainable trend and require a sharper policy response later. He thought further that the potential benefits of this insurance outweighed the risk that such an action would have a significant negative impact on U.S. economic activity. He also believed that signaling a greater willingness to tolerate modest policy adjustments in response to emerging developments would foster more flexible movements in longer-term financial markets, and specifically enable longer-term interest rates to play their traditional role as automatic stabilizers for the economy more effectively.
• Roger W. Ferguson, Jr.
• Edward M. Gramlich
• 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

Read the full minutes

What changed from the previous meeting’s minutes

• The directive shifted from an asymmetric bias toward firming to a symmetric directive with no presumption on policy direction.
• The dollar appreciated against the G-10 currencies over the intermeeting period, versus a decline previously.
• M2 growth for the year through November was slightly above the upper bound of its range, versus at the upper bound in October.
• The staff forecast projected somewhat greater moderation in economic expansion and slightly less pressure on wages and prices.
• The unemployment rate fell to 4.6 percent in November, down from 4.7 percent in October.
• The next meeting was scheduled for February 3-4, 1998, instead of December 16, 1997.

Summary generated automatically from the two documents.

Source