June 30–July 1 · Published August 20, 1998
Statement·Presser·Minutes·Policy
AGAlan GreenspanJune 30–July 1, 1998 FOMC Minutes
Vote
- Roger W. Ferguson, Jr.
- Edward M. Gramlich
- Alan Greenspan
- Thomas M. Hoenig
- Jerry L. Jordan ↑ dissented
- Mr. Jordan dissented because he believed that the unsustainably rapid growth of domestic demand--fueled by the acceleration of money and credit growth in the past year--was reflected in the recent sharp increase in imports and rising trade deficits. As U.S. output growth slows significantly from the rapid pace of 1997 and early 1998, it will be essential that domestic demand also slow. The very welcome progress toward eliminating inflation in recent years has contributed to the outstanding performance of the economy. Allowing domestic demand to continue to exceed domestic production would run the risk that corrosive effects of rising inflation would undermine future growth prospects. Furthermore, the resultant trade and current account deficits would have to be matched by ever larger inflows of foreign capital. Modest monetary restraint at this time might prevent either the buildup of inflationary imbalances that would eventually necessitate future policy restraint or unsustainable capital flows. In either case an economic contraction might become unavoidable.
- Edward W. Kelley, Jr.
- William J. McDonough
- Laurence H. Meyer
- Cathy E. Minehan
- William Poole
- Alice M. Rivlin
From the minutes
FOMC minutes
Secretary
Footnotes
1 Attended portion of the meeting relating to the discussion of the Committee's consideration of its monetary and debt ranges for 1998 and 1999.
2 Attended portions of the meeting relating to the Committee's review of the economic outlook and consideration of its monetary and debt ranges for 1998 and 1999.
What changed from the previous meeting’s minutes
- Committee voted unanimously to reaffirm 1998 monetary ranges and extend them tentatively to 1999.
- Dissent count changed from two (Jordan, Poole) to one (Jordan only).
- Poole switched from dissenting to supporting the unchanged policy directive.
- Members judged Asian crisis effects likely more severe and longer lasting than earlier anticipated.
- Economic expansion assessed as slowing considerably in second quarter versus rapid first quarter.
- Directive retained bias toward tightening, with all but one member supporting unchanged policy.
Summary generated automatically from the two documents.