November 17 · Published December 23, 1998
Statement·Presser·Minutes
AGAlan GreenspanNovember 17, 1998 FOMC Minutes
Our reading
The minutes read somewhat more hawkish relative to the statement because they reveal the internal debate and dissent among members, highlighting concerns about tight labor markets, rapid monetary growth, and the risk that easing could fuel unsustainable stock market gains or future inflation—caveats that were not fully reflected in the more concise, forward-looking statement.
Our reading compares the minutes of the November 17 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
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 two recent reductions in the Federal funds rate were sufficient responses to the stresses in financial markets that had emerged suddenly in late August. An additional rate reduction risked fueling an unsustainably strong growth rate of domestic demand. He expressed concern that the excessively rapid rates of growth of the monetary and credit aggregates were inconsistent with continued low inflation. Moreover, any further monetary expansion in response to economic weakness abroad could ultimately have a disrupting influence on domestic prosperity if policy were forced to reverse course at a later date to defend the purchasing power of the dollar.
- Edward W. Kelley, Jr.
- William J. McDonough
- Laurence H. Meyer
- Cathy E. Minehan
- William Poole
- Alice M. Rivlin
From the minutes
FOMC minutes
It was agreed that the next meeting of the Committee would be held on Tuesday, December 22, 1998.
The meeting adjourned at 1:25 p.m.
Normand Bernard
Deputy Secretary
What changed from the previous meeting’s minutes
- Federal funds rate target lowered from 5-1/4 percent to 4-3/4 percent.
- Directive changed from asymmetric toward ease to symmetric.
- One member, Mr. Jordan, dissented; previous vote was unanimous.
- Swap arrangements with European central banks allowed to lapse; Canadian and Mexican arrangements renewed.
- Maximum maturity of System repurchase agreements extended from 15 to 60 calendar days.
- Discount rate reduced from 5 to 4-3/4 percent on October 15.
Summary generated automatically from the two documents.