August 18 · Published October 1, 1998

Statement·Presser·Minutes

August 18, 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 underlying strength of aggregate demand in the U.S. economy would remain fundamentally intact, despite economic problems abroad. The problems in Asia provide a channel for economic imbalances to develop. Exports from some U.S. manufacturing industries will decline due to softer foreign markets and import competition. At the same time, domestic demand for imports, housing, and consumer durables will increase due to favorable interest rate trends. Though U.S. production of goods and services might slow during the period ahead, it is not yet clear that total demand will diminish at a comparable pace. At the same time, ample credit provision encourages speculative lending and excessive consumption. Consequently, continued rapid growth in the money supply creates the risk that inflation will accelerate and economic imbalances will become protracted.
• Edward W. Kelley, Jr.
• William J. McDonough
• Laurence H. Meyer
• Cathy E. Minehan
• William Poole
• Alice M. Rivlin

From the minutes

Read the full minutes

What changed from the previous meeting’s minutes

• Directive shifted from asymmetric tightening bias to symmetric policy stance.
• One member (Jordan) dissented in both meetings, favoring immediate tightening.
• Unemployment rate rose from 4.3 percent to 4.5 percent.
• Members saw downside risks as increased appreciably, not just upside inflation risks.
• GM strike cited as depressing output and retail sales in current minutes.
• M3 growth described as about unchanged in July, versus robust second-quarter growth previously.

Summary generated automatically from the two documents.

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