[Federal Register Volume 65, Number 6 (Monday, January 10, 2000)]
[Notices]
[Pages 1391-1392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-433]
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FEDERAL RESERVE SYSTEM
Federal Open Market Committee; Domestic Policy Directive of
November 16, 1999.
In accordance with Sec. 271.5 of its rules regarding availability
of information (12 CFR part 271), there is set forth below the domestic
policy directive issued by the Federal Open Market Committee at its
meeting held on November 16, 1999.\1\ The directive was issued to the
Federal Reserve Bank of New York as follows:
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\1\ Copies of the Minutes of the Federal Open Market Committee
meeting of November 16, 1999, which include the domestic policy
directive issued at that meeting, are available upon request to the
Board of Governors of the Federal Reserve System, Washington, D.C.
20551. The minutes are published in the Federal Reserve Bulletin and
in the Board's annual report.
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The information reviewed at this meeting suggests continued solid
expansion of economic activity. Nonfarm payroll employment increased
appreciably on average over September and October, and the civilian
unemployment rate dropped to 4.1 percent in October, its low for the
year. Industrial production recorded a strong gain in October after
having been depressed in September by the effects of hurricane Floyd.
Total retail sales were flat in September and October owing to a drop
in sales at auto dealers; sales at other stores were fairly robust.
Housing activity softened somewhat over the summer but has remained at
a high level. Trends in orders suggest that business spending on
capital equipment has continued to increase. The July-August deficit in
U.S. trade in goods and services was higher than its average in the
second quarter, as further growth in imports exceeded the rise in
exports. Inflation has continued at a moderate pace, though above that
in 1998 owing to a sharp rebound in energy prices. Labor compensation
rates have been rising more slowly than last year.
Most market interest rates have posted small mixed changes since
the meeting on October 5, 1999. However, measures of share prices in
equity markets have registered sizable increases over the intermeeting
period. In foreign exchange markets, the trade-weighted value of the
dollar has changed little over the period in relation to the currencies
of a broad group of important U.S. trading partners.
M2 continued to grow at a moderate pace in October while M3
accelerated. For the year through October, M2 and M3 are estimated to
have increased at rates somewhat above the Committee's annual ranges
for 1999. Total domestic nonfinancial debt has continued to
[[Page 1392]]
expand at a pace somewhat above the middle of its range.
The Federal Open Market Committee seeks monetary and financial
conditions that will foster price stability and promote sustainable
growth in output. In furtherance of these objectives, the Committee
reaffirmed at its meeting in June the ranges it had established in
February for growth of M2 and M3 of 1 to 5 percent and 2 to 6 percent
respectively, measured from the fourth quarter of 1998 to the fourth
quarter of 1999. The range for growth of total domestic nonfinancial
debt was maintained at 3 to 7 percent for the year. For 2000, the
Committee agreed on a tentative basis in June to retain the same ranges
for growth of the monetary aggregates and debt, measured from the
fourth quarter of 1999 to the fourth quarter of 2000. The behavior of
the monetary aggregates will continue to be evaluated in the light of
progress toward price level stability, movements in their velocities,
and developments in the economy and financial markets.
To promote the Committee's long-run objectives of price stability
and sustainable economic growth, the Committee in the immediate future
seeks conditions in reserve markets consistent with increasing the
federal funds rate to an average of around 5-1/2 percent. In view of
the evidence currently available, the Committee believes that
prospective developments are equally likely to warrant an increase or a
decrease in the federal funds rate operating objective during the
intermeeting period.
By order of the Federal Open Market Committee, December 27,
1999.
Donald L. Kohn,
Secretary, Federal Open Market Committee.
[FR Doc. 00-433 Filed 1-7-00; 8:45 am]
BILLING CODE 6210-01-F
